Wednesday, 9 December 2015

Sitrep - 9 Dec, 2015

French regional elections this week reinforce the right-wing National Front’s impressive rise in popularity. The party won six of 13 metropolitan regions in the first round, while support dropped for competing parties – including President Francois Hollande’s Socialist Party. National Front’s success reflects an unease among French voters frustrated with high unemployment and sluggish growth, coupled with security and immigration worries.

It also adds another data point to a continuing trend of Euroskepticism. This week Denmark voted not to reverse the long-standing opt-out on EU justice legislation and law changes on the European Police Office (Europol). Although the rule change was apparently minor, the Danes are suspicious of interpretations benefiting Brussels in the future. Many EU countries, Denmark included, are losing trust in Brussels’ complex bureaucracy which is slowly ripping the wider EU project apart.

In Ukraine, military commanders announced that two towns in the country’s restive east are once more under Kiev’s control. This follows the destruction of electricity pylons in Crimea, cutting the peninsula off from energy. Kiev blames “thugs” for the sabotage, but the scenario that Kiev had nothing to do with the pylon destruction is looking increasingly unlikely. Russia has retaliated by ceasing coal exports to Ukraine, but otherwise is staying quiet.

These events suggest a new crisis is developing in the embattled country. Ukraine is essentially a frozen conflict and Kiev is worried the US and Europe are losing interest in its plight and want a quick negotiation agreement. Manufacturing a crisis would help attract attention back to the conflict and Kiev, but it is a risky move. Russia appears not to have taken the bait and prefers Ukraine to be a peripheral concern for the US. Kiev will however look for more ways to attract attention.

Venezuelan legislative elections unveiled the impressive discontent brewing in the country’s civil society. Democratic Unity Roundtable (MUD) won 99 of the 167 assembly seats while the government’s traditionally pro-government Chavista party, the United Socialist Party of Venezuela (PSUV), won 46 seats. With 20 seats remaining to count, the opposition party could achieve a qualified majority giving it significant powers.

While the elections are not presidential, they do mean the ruling party will struggle to enact legislation quickly in 2016. Voters have suffered a particularly tough 2015 as the global oil price – Venezuela’s largest export – slipped to all-time lows. Inflation on the bolívar is close to 200% and food imports are only trickling in. However, Caracas has chosen to invest in its energy infrastructure in the hope oil prices will rebound. Time will tell whether this is a wise choice.

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