Surprises, Shocks and Unintended Consequences//Getting Ready for the 2H

A little more than halfway through 2024, the global political landscape remains fluid. The last month alone has seen snap elections called in the UK and France and a new drama unfolding over President Biden’s continued candidacy, underscoring the high potential for surprises, shocks and unintended consequences at this juncture, when public opinion is volatile and elected leaders struggle to maintain legitimacy and secure a mandate—gaps which other actors seek to exploit for their own benefit. ?

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Putin may be disappointed that the far-right RN failed to secure first place in French elections, given his historic support for Marine Le Pen’s movement, but he is making the most of the visit of India’s Narenda Modi to his dacha on the outskirts of Moscow on the eve of the NATO summit. Questions are being raised about how long India can expect to maintain good relations with the US and Europe while it buys Russian oil at discounted rates and Modi bear hugs Putin. Perhaps indefinitely, as India seeks global superpower status. In the Middle East, the war between Israel and Hamas has spilled over into Lebanon, with markets barely taking notice. The “Danger Zone” summer that we warned about is galloping along.

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These developments do not lend themselves to facile simplifications; the UK’s centre-left Labour party managed to secure a historic victory, thanks in part to a boost by the “first past the post” system and a fragmented right, and the left-wing alliance pulled off a shock victory in France , but includes firebrand populists of its own and is fragile and unwieldy. The appeal of political alternatives offering simple answers to complex problems has not been eroded, only postponed.

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In our conversations with clients we continue to caution against the expectation of mean reversion, and the tendency to marginalise the impact of conflicts and political volatility, both of which weigh on leaders, drain energy and resources from improving growth prospects and boosting competitiveness, and contribute to our view that inflation will continue to stay stubbornly high—meaning the interplay between high prices and popular discontent will also carry on.

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In Washington, the leaders of NATO member states are gathering and will mark the alliance’s 75th?anniversary. Not long ago dismissed by many as obsolete, NATO gained newfound relevance—and support—after Russia’s invasion of Ukraine. NATO leaders will also discuss engagement in the Indo-Pacific and what role, if any, it should take on with regard to countering China. While Ukraine will not be offered membership, it will be granted another package of military aid. The increasing likelihood of a return of Donald Trump to the White House is concentrating minds on the idea that spending 2.5% of GDP annually on defence is now the floor and not a ceiling. One of the first moves by the new UK Foreign Minister, David Lammy, was to agree a new defence pact with Europe, an important signal after Brexit and in light of uncertainty about future relations with Washington.

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We will be sharing our thoughts on what is in store for the second half on Thursday during our next webinar. Register below and let me know by reply what you are most interested in.

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Smoke Signals - 2H Global Political Outlook Webinar - Fordham Global Foresight

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Date:?Thursday July 11th Time:?9:00-9:45 am EST / 14:00-14:45 pm UK

Click here to register.

Tina Fordham Discusses French Snap Elections on CNBC's Squawk Box Europe with Karen Tso and Arabile Gumede

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Snap elections in France have?thwarted?the far-right, a welcome outcome. The post-WWII “cordon sanitaire” has endured—thanks to the creation of the cross-party “Front Republicain” that coordinated in close races to keep the?far?right from power. But it’s too soon to write the political obituary of the French far-right. Far from the “clarification” that Macron hoped to achieve from the gambit, what will follow is an extended period of political disarray.

Tina Fordham with Tom Keene and Paul Sweeney on Bloomberg Surveillance:

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I discussed with the one and only Tom Keene and Paul Sweeney on Bloomberg's, "Bloomberg Surveillance".

Find out why Tom Keene says that there’s “no one better than the always excellent Tina Fordham "?to help understand the politics of the week.?The recording is below.

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