Polish PiS may be largest party yet fail to govern

Significance Right-wing Law and Justice (PiS), the main opposition party, may emerge from the elections as the largest parliamentary group. However, it could find itself in opposition for lack of partners. Even if it secures a parliamentary majority, on its own or heading a coalition, the new government could be dogged by tensions between its leader and the prime minister-designate. Impacts PiS's pledges of socioeconomic reform and a more assertive international role suggest domestic and foreign policy discontinuity. However, the previous PiS government pursued relatively orthodox economic policies. PiS hostility to European integration was largely rhetorical; there may be less discontinuity in practice in economic and foreign policy. A PO-led coalition would be weak and unstable, uniting partners with different policy agendas and 'co-habiting' with a PiS president.

Significance The reshuffle involves some significant changes, including the promotion of Economy Minister Nadia Calvino as first deputy prime minister. Other notable changes include new ministers at the head of foreign policy and territorial policy, which deals with relations with Catalonia. Impacts Sanchez has increased the number of women and young people in the new cabinet; this could broaden his appeal among centrist voters. While Madrid will continue to respect EU policy parameters, Sanchez’s continued reliance on UP and ERC support will worry investors. Sanchez’s leadership of the PSOE could come under threat if he is seen as ‘giving too much’ to Catalan nationalists.


Subject Foreign policy after the attempted coup. Significance Before the July 15 coup attempt, foreign policy was showing signs of turning towards pragmatism from the ambitious positions associated with former Prime Minister Ahmet Davutoglu. Rapprochement was sought with both Russia and Israel, and relations with the United States and EU were relatively stable. The attempted coup introduces considerable uncertainty. President Recep Tayyip Erdogan's insistence that US-based cleric Fethullah Gulen was behind it is drawing the United States into Turkey's most serious political trauma in decades. Impacts Relations with the West are unlikely to return to their pre-coup warmth soon. The most likely result for US-Turkish relations is what may be termed a 'stressed-out partnership of convenience'. How both US-Turkish relations and Turkey's conflict with the PKK develop will determine Turkish policy on Syria and the ISG.


Significance However, the June 14 local elections resulted overall in the pro-European parties winning 56.5%, with the pro-Russians securing 31.5%. The result will be a relief for the pro-European camp, which had feared that the ongoing banking scandal -- which has seen 1 billion dollars go missing and the resignation on June 12 of Prime Minister Chiril Gaburici -- could portend an upsurge in support for pro-Russian groups. However, despite the pro-European win, Moldova's Gagauz region remains one of Russia's strongest supporters and will remain a potential pressure point. Impacts Russia's enduring prominence in Gagauzia's political landscape will give Moscow a foothold in Moldovan politics. Russia's interest in Moldovan politics will prompt Moldovan supporters of European integration to speed up that process. The EU will have to continue to support Moldova's economy, if only to match Russia's economic support for Gagauzia.


Significance The case investigates whether Lula illegally used his overseas connections to assist Brazilian construction giant Odebrecht, which has considerable African investments. Expanding influence into Africa began under Lula. It has since been at the heart of Brazil's broader push to advance its global and regional credentials. The economic slowdown raised doubts about its ability to sustain this push. The Petrobras corruption scandal has accelerated such scepticism, threatening to reduce significantly the scope of Brazil's foreign policy in the region. Impacts Ties with smaller Lusophone states in West Africa prioritise security, reflecting that sub-region's geostrategic position for Brazil. Brazil plays prominent international law and justice roles in those states but through UN structures -- limiting the financial impact. Brazil's small military capacity constrains its scope to rebuff US military presence in the smaller Lusophone states.


Subject Prospects for India in 2016. Significance Prime Minister Narendra Modi's government has accelerated its agenda of piecemeal and sequential reform following his Bharatiya Janata Party (BJP)'s defeat in the Bihar elections last month. As difficult state elections approach in the first half of 2016, the government is banking on these reforms and headline growth to secure voter and investor support. In foreign policy, the government is likely to focus on regions of strategic importance, especially Russia and the Middle East.


Significance The Pakistan Muslim League-Nawaz (PML-N)’s five-year term ended on May 31. PML-N President Shehbaz Sharif faces a tough fight to become prime minister, with the main challenge set to come from Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) and further opposition provided by Bilawal Bhutto Zardari’s Pakistan Peoples Party (PPP). Impacts With Khan as prime minister, the military would likely have free rein to pursue an anti-India foreign policy. Khan would step up his criticisms of the war in Afghanistan and likely have a difficult relationship with US President Donald Trump. Pakistan under any government will pursue balanced diplomacy in the Middle East, seeking good ties with both Saudi Arabia and Iran.


Subject Japan's foreign policy strategy. Significance Prime Minister Shinzo Abe has changed core structures and frameworks within which Japan's foreign and defence policies are made. These changes can be seen as responses to the rise of China. Impacts Japan will use aid to counter China's influence, competing on quality and a record of delivering on promises. Laws passed under Abe could allow much greater defence cooperation with Australia and India. India is a future partner in Japan's developing relationship with Africa to compete with China’s Africa strategy.


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 The next election will be the first since the military, led by then general, now Prime Minister Prayuth Chan-ocha, deposed Yingluck Shinawatra’s administration in May 2014. Impacts The prime minister’s Washington visit later this month will be portrayed as a pre-election display of foreign policy strength. The government will increase public investment for the remainder of this year, at least. This, it hopes, will maintain economic momentum, and strengthen the junta’s popular appeal. The post-election possibility of fresh political interventions by the military will concern investors.


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