Sunday 28 May – Sunday 4 June:
On Sunday, Belarus’ leader since 1994, Alexander Lukashenko (a former director of a state farm) bizarrely announced “nuclear weapons for everyone” who joined the Union State of Belarus and Russia. This, in relation to the transfer of Russian tactical nuclear weapons to the territory of Belarus. The Agreement on Establishment of the Union State of Belarus and Russia Treaty was signed in 1999 and formed a legal framework for a “wide-ranging alliance that spanned economic, information, technology, agriculture, and border security among other things between the two countries”. The 69 year-old, often disparagingly called Europe’s “last dictator” has had a number of unexplained absences in public life in the last month. Rumours have been swirling around his health, including that he was poisoned by Russian secret services. Such statements may reflect a declining Lukashenko, who said he is “not planning to die, guys” while in Moscow for the annual Eurasian Economic Union (EAEU) summit on May 24-25. Later, Lukashenko announced that weapons were already in the process of being transferred.
On Monday during daylight hours, Russian forces bombarded Ukraine’s capital Kiev with an array of missiles, following overnight attacks on targets in the capital and across the country. Early on Tuesday morning three residential buildings in Moscow were hit by drones, causing “minor damage” according to Moscow’s mayor Sergei Sobyanin. There were no serious injuries reported. The Russian military says eight drones were used in the strikes. It claimed five were shot down using the Pantsir-S surface-to-air missile system, and the remaining three were diverted from their intended targets with signal jamming technology. Putin remarked on the incident, blaming Ukraine for the “clear sign of terrorist activity” meant to intimidate Russian citizens. “It’s clear what needs to be done to beef up air defenses, and we will do it,” he added. Ukraine has denied direct involvement in the drone attack. Russia struck Kiev at least 17 times in May.
Also on Tuesday, leaders and representatives of all of South America’s 12 countries met in Brazil’s capital Brasilia, where they were hosted by Brazilian president Luiz Inacio Lula da Silva. Lula aims to revive a regional bloc previously known as the Union of South American Nations (UNASUR) – an leftist organisation set up in 2008 by Venezuelan President Hugo Chávez and Lula (president at the time) to counteract the influence of the United States in the region. UNASUR was modelled on the European Union and envisioned a common passport, parliament and single currency. The organisation disintegrated as South American countries moved politically rightwards. Now that South American elections have returned leftists to power, Lula hopes to reignite the organisation – at the summit he reiterated his hopes for greater regional integration and a common currency to challenge the supremacy of the dollar in the Mercosur trade bloc. Mercosur comprises Argentina, Brazil, Paraguay and Uruguay and there has been talk of a common currency for decades. There are many reasons to be skeptical – it took the European Union nearly 50 years of discussion before the euro was finally introduced.
On Thursday, the Hashemite Kingdom of Jordan celebrated a royal wedding at the Zahran Palace in the Jordanian capital Amman. The 28 year-old Crown Prince Hussein married Saudi Arabian architect Rajwa al-Saif. The bride is related to Saudi Arabia’s crown prince and de facto ruler, Mohammed bin Salman (MBS), through her mother, who hails from the prominent Al-Sudairi family, another sign in the thawing relationship between Jordan and Saudi Arabia. Jordan’s royal family has reigned since 1922 and claims direct descent from the Islamic Prophet Muhammad. In attendance were American First Lady Jill Biden and the Prince and Princess of Wales.
On Thursday, SpaceX and Tesla CEO Elon Musk concluded a “whirlwind” 48-hour trip to China – his first trip to the country since the Covid pandemic. Arriving in Beijing on Tuesday, Musk began his trip meeting Chinese Foreign Minister Qin Gang. After the meeting, he had separate discussions with the Chinese ministers for technology and commerce, during which topics ranged from electric vehicles to U.S.-China relations. He met with other government officials and toured the company’s mega factory in Shanghai – Tesla’s largest outside the U.S. – where he congratulated employees on their work. Musk said “It’s been incredibly impressive how you have been able to overcome so many difficulties and so many challenges.” In 2022, Tesla delivered 1.31 million vehicles, with the Shanghai factory delivering more than half of those.
On Thursday, both houses – the Senate and House of Representatives – of Congress had passed the final agreement to suspend the debt limit until 2025. The House passed the bill on Wednesday, and the Senate on Thursday. On Friday evening President Joe Biden said “Passing this budget agreement was critical. The stakes could not have been higher,” from the Oval Office in the White House. “Nothing would have been more catastrophic,” than defaulting on the country’s debt, he said “No one got everything they wanted but the American people got what they needed,” Biden said, highlighting the “compromise and consensus” in the deal. “We averted an economic crisis and an economic collapse.” On Saturday, the White House announced that President Biden had signed the bill. As part of the agreement, new rules will make it easier for both fossil fuel and renewable energy projects to get licences.
During the Second European Political Community Summit in Moldova on Thursday, attended by forty-five heads of states and governments, the president of Serbia and Kosovo held talks to resolve the tense political crisis in northern Kosovo that on Monday spiralled into violence. Kosovo authorities have stoked tensions in the north of Kosovo – majority Serb – by installing Albanian mayors elected with a turnout of just 3.5% after Serbs boycotted the election. The United States and others have strongly criticised Kosovo’s actions. NATO secretary-general Jens Stoltenberg announced an additional 700 peacekeepers would be sent to Kosovo.
Beginning on Thursday and lasting until Wednesday, the coastguards of the U.S., Japan and the Philippines launched maritime exercises in the South China Sea, in the first such drills between the three countries at a time of growing concern about China’s activities in the region. The exercises, in the waters off the Bataan province of the Philippines, involved four Philippine vessels and one each from the U.S. and Japan. Both China and the United States have upped the tempo of war games in the South China Sea as tensions rise in the region. On Tuesday, the U.S. military said a Chinese fighter pilot performed an “unnecessarily aggressive manoeuvre” near an American surveillance aircraft operating over the South China Sea last week. China called the incident “dangerous”, and a “provocation”, vowing that China would “continue to take all necessary steps to resolutely protect its own sovereignty and security”. In another incident, the Pentagon says that on Saturday the American destroyer USS Chung-Hoon and the Canadian frigate HMCS Montreal were conducting passage of the Taiwan Strait in international waters when a Chinese warship approached and maneuvered in “an unsafe maritime interaction“. The Chinese Defence Minister Gen. Li Shangfu called “freedom of navigation” patrols a provocation to China.
On Saturday, incumbent Recep Tayyip Erdogan was sworn in for a third term as president of Turkey. Erdogan received 52.2 percent of votes in the second round of elections held on May 28. The same day, Erdogan announced his new cabinet, naming the former economy chief and respected former banker Mehmet Simsek as the Treasury and Finance Minister. Simsek had previously served as Finance Minister between 2009-2015, before stepping down as the country’s currency the lira crashed multiple times in 2015 – his return could signal a departure from Erdogan’s unique approach to economics (maintaining low interest rates in the face of high inflation). Erdogan announced that as president he would “safeguard the existence and independence of the state…We will embrace all 85 million people [in the country] regardless of their political views, origins, or sect” he said at the inauguration ceremony at the parliament in Turkey’s capital Ankara. The inauguration was followed by a lavish ceremony at the presidential palace in the capital attended by dozens of world leaders.
In the week ahead:
Important U.S. economic data will be released ahead of the FOMC on June 13-14.
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