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FILE PHOTO: Spain's Socialist leader and Prime Minister Pedro Sanchez, accompanied by his wife Begona Gomez, applauds as he addresses supporters during the general election, in Madrid, Spain, July 23, 2023.
Spain’s Sanchez surprises with a siesta
Spanish Prime Minister Pedro Sánchez posted a letter on social media Wednesday announcing he would suspend all his public duties and take a few days to consider resigning. Earlier in the day, a judge opened an investigation into his wife, Begoña Gómez, over corruption surrounding government tenders and subsidies. The court did not give specific details of its allegations.
In his letter, Sánchez accuses “ultraconservative” interests of pursuing a cynical smear campaign against his wife because Spanish voters rejected them at the ballot box last year. Gómez holds no official position and is not a politician, and Sánchez firmly denied there was any case for the court.
Nonetheless, he wrote that his love for her made him question whether it was all worth it. “I sincerely don’t know,” he wrote. “This attack is unprecedented, so serious and so vulgar that I must stop and reflect with my wife.”
Subordinate ministers and political allies are publicly backing Sánchez’s decision, but maybe not purely out of solidarity. The PM is a notorious risk-taker who managed to hold on to power against the odds last year by calling a snap election and then cobbling together a minority coalition. And wouldn’t you know it, there’s a crucial regional election on May 12 in wealthy, often separatist-leaning Catalonia.
A bit of sympathy for the PM’s wife certainly can’t hurt, can it?
Sánchez said he will announce his decision by Monday, April 29.
Smooth sailing for LNG amid Biden’s pause, Trudeau’s hesitation, and Johnson’s political gamble?
If you thought America’s liquefied natural gas policy had nothing to do with Russia’s war in Ukraine, think again. LNG is all over the news right now, thanks to House Speaker Mike Johnson (R-LA) cooking up a plan to link the issues.
Meanwhile, north of the border, Canada is having its own LNG squabbles as the future of the multibillion-dollar industry is being debated. Tensions between the federal government, which is increasingly weary of fossil fuel mega-projects, and provincial governments keen on resource revenue, are shaping the debate.
And so are considerations about what’s happening down south. In January, the Biden administration suspended pending approvals of LNG exports to countries with which it doesn’t have a free trade agreement. It’s waiting on the Department of Energy to sort out what these exports mean in terms of costs to US consumers and climate impact. The pause came in no small part thanks to the efforts of climate change activists.
Observers suspect Trudeau can’t get too far from Biden on the issue, and cross-border climate activists used Biden’s more aggressive climate policies to try to box in Trudeau. In January, Biden’s LNG pause put Canada’s LNG export policy in the spotlight, pressuring the country to enact its own moratorium (which it hasn’t done) – especially if it hopes to meet its 2030 climate goals. Also, the LNG market is only so big and may be headed for a glut, so US projects or exports – or a lack thereof – shape Canadian calculations.
When the US suspended new LNG approvals in January, President Joe Biden was quick to point out that the pause wouldn’t affect existing exports to US allies in the “near term.” But in the long-term? A lot depends on the global market, geopolitical considerations, and domestic politics, including climate activist pressure on Biden – who faces a reelection battle in November.
Biden was nonetheless keen in January to make everyone aware the US remains the top LNG exporter and that the energy source wasn’t going to stop flowing overnight. In fact, the administration expects export capacity to more thandouble by 2028, and last year the country’s LNG project approvals were record-setting.
The trade authorization review is important because it calls into question how viable LNG projects and exports will be long term in a world in which climate policies are moving away from fossil fuels, which are facing increasing competition from renewables. But it may also be up for negotiation.
Biden wants desperately to get an aid bill through Congress to fund Ukraine’s defense efforts against Russia. The Senate has passed a bill, but it’s stalled in the House, where Johnson has held it up.
Facing pressure from his own party, who oppose the Ukraine aid package, Johnson – who is also fighting to retain his gavel – has dreamed up a trade that involves putting the aid bill to a vote and backing it in exchange for Biden reopening the LNG taps. Trouble is, that may not be enough for GOP hardliners, or at least not enough of them to get the thing passed, which would compromise not only the Ukraine aid deal but Johnson’s speakership and political career.
The plan wasn’t initially warmly embraced, particularly among the right-wing GOPers more focused on border policy than LNG. On the other side of the aisle, Democrats weren’t super enthusiastic about it either, and climate change activists and politicians are pressuring Biden to reject the deal. On Tuesday, Reuters reported that White House sources said the administration was open to the deal, pending a look at the full plan, but a White House spokesperson said the report was untrue and that President Joe Biden stands behind the pause. All of this back-and-forth and crossed wires suggests Johnson’s deal might be more of an opening bid than a final one.
Noah Daponte-Smith, a US analyst at Eurasia Group, says this is merely “the negotiating stage,” noting that whether the Ukraine package gets through Congress is another matter. Johnson is trapped between his own party and Democrats, both of whom he needs if the Ukraine bill has any chance of passing.
The Democrats want a clean bill – with no extra measures – which means they aren’t interested in LNG additions. Even Johnson isn’t “enormously committed” to LNG, according to Daponte-Smith, but the speaker is running out of options.
“I think he wants to hold on to the gavel and this is something convenient he can put forward to the Republican caucus,” he says.
The border deal is a non-starter for the Ukraine package, Daponte-Smithe says, given that former President Donald Trump has declared it dead.
And it’s not just the US squabbling over LNG.
Last week, Canadian Energy and Natural Resources Minister Jonathan Wilkison said the Liberal government wasn’t interested in funding future LNG projects. Beyond what’s already in the works, no more LNG projects will open in Canada unless the private sector is willing to go it alone. As of December, there were eight LNG projects in development worth over CA$100 billion, which includes the LNG Canada project, which Ottawa sank CA$275 million of public money into back in 2019, calling the project an investment “up to $40 billion” that “will lead to 10,000 middle-class jobs.” How times have changed.
Ottawa is turning its back despite Greece recently expressing interest in buying LNG from Canada – as have Japan and Germany. A few years ago, Prime Minister Justin Trudeau wasn’t convinced of the upsides to shipping LNG to Europe, and Wilkinson’s latest comments suggest the PM hasn’t changed his mind. Of course, just because there’s demand for Canadian LNG today doesn’t mean there will be tomorrow, and the IEA expects slower demand growth in the years to come.
LNG opponents suggest the future for the energy source is dim and are calling for Canada not to see any US slowdown on LNG as an opportunity to fill the gap. Since nuclear starts and restarts are on the rise in Asia, and renewables projects are soaring globally, the world faces a potential oversupply of gas.
Neither the US nor Canada are going to fully halt export and development anytime soon. But the fact that the Biden administration and Trudeau government are even the slightest bit weary of LNG projects is a major development in energy and climate policy.
Hydraulic excavators scoop the broken rock into 100- or 150-tonne haul trucks at Agnico-Eagle's Meadowbank mine in Nunavut June 28, 2011.
Nunavut’s golden birthday present
The traditional 25th-anniversary gift is silver, but how about mines full of precious minerals? The vast northern Canadian territory of Nunavut turns 25 on Monday, and for its birthday it’ll also start having more control over decisions about its lands, waters, and reserves of gold, diamonds, iron, cobalt, and rare earth metals.
Background: Nunavut, which makes up about a fifth of Canada’s land mass, was created in 1999 from the eastern part of the Northwest Territories. The split was driven by the Inuit nation’s desire for a culturally grounded government closer to the people and lands it administers.
A January 2024 land transfer agreement gives Nunavut a say over many functions previously managed in Ottawa, putting it on the path to equal footing with the rest of Canada. As the territory’s Premier P.J. Akeeagok says, now “we'll decide our own future.”
The transfer of power from the federal to territorial governments will happen over the next three years.
If geopolitics are on your radar, Nunavut should be too. Nunavut yields minerals that are essential for battery production, which will be a source of increasing global leverage during the energy transition.
The draw of Nunavut’s (literal) goldmine of resources has already caused geopolitical tension. In 2020, Canada blocked a CA$230 million Chinese takeover of a Nunavut gold mine on national security grounds. That dealt an economic blow to the North, but sizzling US-China-Canada tensions surrounding the arrest on a US warrant of Huawei CFO Meng Wanzhou and the subsequent imprisonment of two Canadians in China likely helped kill the deal. Plus, China’s assertion that it’s already an “important stakeholder in Arctic affairs” with a right to a greater role in the region — even though it is nearly 2,000 miles south of the Arctic Circle — is ringing national security alarm bells.
While the territorial government’s new autonomy over its resources won’t override the federal government’s national security concerns, we’ll be watching as Nunavut balances local economic interests with geopolitical dynamics.
For a more lighthearted geopolitical ‘dispute’ involving Nunavut, check out the 50-year Canada-Denmark “Whiskey War.”Car thieves hit the gas. Drivers foot the bill.
Auto thefts, including carjackings, are up in the United States and Canada. Politicians are noticing – and so are insurance companies. Last week, Ottawa went as far as to convene a national summit dedicated to the problem, and the criminal trend has grabbed headlines in both countries, tracking the many locations where vehicles end up, from Malta to Mexico to Ghana.
The jump in stolen vehicles on both sides of the border has some concerned about a return to the bad old days. In 1991, there were 659 car thefts for every 100,000 people in the US. In 2022, there were 283 – much lower than in the 90s but the most since 2008 and an increase of 10% from 2021. More than a million vehicles were pinched, and Kias and Hyundais have been particularly hard hit, with a leap of 1,000% since 2020.
Canadian data paints a similar picture, with a decline in thefts throughout the early 2000s followed by a recent increase. In 2022, over 105,000 vehicles were stolen. While data is still coming in, 2023 looks to be just as bad or worse.
As cars go missing, and bandits make off like, well, bandits, drivers are set to pay for it. Politicians might end up paying, too, if dissatisfied voters turn their frustrations on the leaders. And while there are plenty of solutions to the problem, it won’t be solved overnight or by stump speeches calling for ‘law and order’.
Who’s responsible? Organized crime is largely to blame for the rise in thefts. Vehicles are stolen and transported overseas to the Middle East, Africa, Asia, and Eastern Europe through major ports such as Vancouver, Montreal, Halifax, and Newark. Some are driven across the US-Mexico border. Proceeds from stolen vehicles are used to fund gang and cartel operations and contribute to, among other things, human trafficking, drug dealing, and the illicit arms trade.
Why is it happening? As always, good, old-fashioned supply and demand is a key cause, particularly after the pandemic strained supply chains and the value of vehicles and auto parts shot up.
According to one expert, lax policing and a “mission accomplished” attitude adopted by police and politicians in the wake of previously declining theft rates also play a role in the increase, especially in Canada. Poor monitoring and policing of ports are also to blame.
Stolen vehicles are a significant problem on both sides of the border, but one country stands out as an extra-convenient playground for thieves. As Michael Rothe, president and CEO of the Canadian Finance and Leasing Association told Maclean’s, in recent years, “Canada in general became very much a high-reward, low-risk environment, particularly compared to the United States.”
Certain vehicles are also getting easier to steal. Last year, a handful of American cities sued Kia and Hyundai over the issue. The companies paid hundreds of millions in California after a viral TikTok trend showed users how easy it was to steal the cars. Manufacturers cutting corners has been a dream for gangsters and a nightmare for drivers as thieves exploit vulnerabilities in vehicles that are increasingly reliant on high-tech. And police rarely find the thieves – 90% of auto theft cases go unsolved in the US.
Who’s paying the price? Insurance rates in the US and Canada are up and may go higher still in 2024. The US saw a 26% increase over last year thanks to, among other factors, inflation and thefts. Drivers of commonly stolen cars in Canada have seen premiums rise between 25 and a whopping 50% in the last two years. A recent survey found more than 80% of Canadians are concerned about auto theft.
What can be done? The issue will likely draw more than just political attention, says Graeme Thompson, senior analyst of global macro‑geopolitics at Eurasia Group.
“I think it will put real pressure on governments to deal with the issue,” he says, noting that action will likely take a tough-on-crime approach, “if for no other reason than it’s easier to promise and communicate tougher criminal justice policies than something like port reform or new regulations for auto manufacturers, which are both downstream from the problem of people’s cars being stolen from their driveways.”
The issue has already brought about a response. In Canada, Conservative opposition leader Pierre Poilievre is promising to bring in tougher penalties for car thieves. Prime Minister Justin Trudeau seems open to charting a similar course. In the US, some states are on the same wavelength, including Tennessee, where candidates are going all-in on the tough-on-crime bandwagon.
Trudeau is also set to spend just under $30 million on the issue, earmarking the cash for the country’s border service agency and both domestic and international cooperation aimed at identifying and tracking down thieves. Ontario – a hotbed for theft – is dedicating its own cash, too, for police projects.
Cities and states in the US are adopting similar law-enforcement and information-sharing programs, including efforts by New York Gov. Kathy Hochul,New Jersey Gov. Phil Murphy, and New York City Mayor Eric Adams.
Drivers, meanwhile, are being advised to take matters into their own hands to help keep their vehicles safe – advice which only goes so far. People hit hard by higher insurance rates can shop around for alternative providers or even go so far as to avoid the most commonly stolen vehicles, for which insurers sometimes charge a premium.
Of course, we can’t divorce any policy action on these files from the electoral considerations that politicians on both sides of the border are watching. President Joe Biden and the Democrats are headed for an election in November while Trudeau and his Liberals, way down in the polls, are due for one by fall 2025. Auto theft may keep their attention.
As Thompson points out, “the perception of rising crime is becoming a real drag on both the Liberals in Canada and the Democrats in the US, and opposition parties are positioning themselves as best to handle the problem.”
In that regard, the opposition sides may have an advantage in both countries. While auto theft might not dominate voters’s minds, as Thompson notes, “if combined with a broader public concern over law and order, it would likely benefit the Tories and the Republicans.” So, don’t expect an end to the issue anytime soon – either thefts themselves or the political hand-wringing.
Everything’s political: sofa, tomato, shoe
If you’re reading this column, chances are you’ll agree that at some level everything is political, right?
All around us, the things we touch, eat, buy, and wear, the people we meet, the ways we communicate – there’s a little politics in all of it. There’s the trade policy that determines where your shirt comes from. There’s the immigration policy that shapes who your kids will befriend in kindergarten or where they’ll work when they grow up. There are the decisions about war and peace that can shape life for you or for family members thousands of miles away.
So from time to time, I want to take a look around the world closer at hand, spotting the big political stories in the small objects around us. Today we’re gonna do three quickies: a sofa, a tomato, and a shoe.
Let’s go.
Your sofa: Where’s it from? If you’re in the US, chances are that for most of the past 30 years, it’s been made in China, the major exporter of furniture to North America. But if you bought it over the past year? It just might be from somewhere closer to home.
That’s because just this week México officially passed China as the US’ largest annual trade partner, taking the top spot for the first time.
That’s a big deal. China has ruled the roost for most of the past 30 years on the strength of its business-minded dictatorship and its vast, relatively cheap labor force. But in recent years, two things started to change all that. First, Donald Trump uncorked a banger of a trade war against Beijing. Then, pandemic-related lockdowns shut much of China’s economy and choked off supply chains around the world.
Companies got spooked. Investors who once prized low costs over everything began to prioritize safer shores. They began scrambling to find places not named "China" to make things to sell to the vast American market: Vietnam, Thailand, and Cambodia. They all boomed.
But México was the big winner. After all, it’s right next to the world’s largest consumer market and has a free trade agreement with Uncle Sam (renegotiated by Trump himself, no less.)
Nowadays, the industry-heavy states of northern México are practically choking on incoming investment. The catch? A lot of it is coming from … China, as companies like, say, Man Wah – one of the world’s leading manufacturers of sofas – pile into Mexico to keep a foot in the American market.
So while you sprawl out on that sofa, ponder this: the 1990s and 2000s world of peak globalization, when companies scoured the planet for the lowest cost production, is over. We now live in a world where proximity and security matter more than cost. Get close to someone on that couch!
Tomato: Speaking of México, consider one of that country’s greatest gifts to the world: the tomato.
The once-feared fruit* didn’t make it widely to Europe until about 250 years ago – no penne al pomodoro or pan con tomate until then – but at the moment it’s a little political grenade on the continent: France and Spain have gotten into it over tomatoes in recent days.
First France said the Spanish ones were “false organic” frauds. Spain shot back that France’s were “inedible.” French farmers roughed up a Spanish tomato truck.
The issue? Paris says Spanish tomato farmers are shirking the EU’s strict rules on pesticides to flood France with cheaper produce. Spain says its own campesinos are fully following the rules and points to massive imports of cheaper Moroccan tomatoes to France as the culprit.
This is more than just a tú dices “tomate,” je dis “tomate” dispute. It echoes the larger wave of farmer protests that is roiling Europe. Across the EU, farmers are raising pitchforks against Brussels, mad about climate-conscious fuel subsidy cuts that are hurting their bottom lines at a time when their costs (for fuel and fertilizer) are already up because of the Ukraine war. Meanwhile, they’re also getting squeezed by cheaper competition from abroad.
Critics of the protests point out that European agriculture has been protected by massive subsidies for decades, and that it’s a shrinking sector of small farms and old farmers that has resisted modernization.
That may be, but no sane politician in Europe wants to be seen ignoring granddad the farmer, so governments across the continent have been rolling back subsidy cuts and icing new trade deals.
Lastly, look at your shoe. And while you’re looking at it, consider the Houthis, the Iran-backed rebel group that controls Yemen.
What could these two things possibly have to do with each other?
The answer is floating in the Red Sea, where, as you probably have heard, the Houthis have been raining drones and missiles down on commercial ships as an act of solidarity with the Palestinians under Israeli assault in Gaza. As a result, shipping companies that move goods through the Red Sea and onto the Suez Canal are rerouting around the Horn of Africa. What’s this got to do with shoes?
As my colleague John found earlier this week, fully HALF of all shoes that go to Europe travel through the Red Sea. And about 40% of all clothing. So if you see a European friend walking around with two left shoes or one bare foot – you know who to blame.
*Yes, the tomato is a fruit. Don’t shoot the messenger. If you can’t handle that, don’t let me be the one to tell you that a strawberry isn’t a berry, but an eggplant is.
GZERO 2023 music playlist
It was a bumpy year, so bump and groove your way into the New Year with our 2023 playlist! We scoured the charts from Buenos Aires to Beijing for songs that captured the zeitgeist, from Ice Spice to Fela Kuti — and make you wanna boogie.
Playlist tracks
Inflation - “Expensive shit” by Fela Kuti
French protests – “Paris is a bitch” by Biga*Ranx
West African coups - “Soldier Take Over” by Yellowman
Milei elected - “Desesperada” by Sara Hebe
European migration - “Desaparecido” by Manu Chao
Politics in general - “Liar’s Dub” by Max Romeo
Climate change failure - “Sogno otro mundo” by Apres la classe and Manu Chao
Struggle between Mexico government and drug cartels - “La People” by Peso Pluma
Nigerian election - “I Told Them” by Burna Boy
Xi Jinping wins historic third term as Chinese president - “Paint the Town Red” by Doja Cat
25th anniversary of Good Friday agreement - “Jackie Down the Line” by Fontaines DC
War in Ukraine - “Heart of Steel” by Tvorchi
Power Barbie - “Barbie World” by Nicki Minaj & Ice Spice
George Santos - “Banned in DC” by Bad Brains
UAW/SAG strikes - “Never Cross a Picket Line” by Billy Bragg
China economic weakness - “Made in China” by Higher Brothers and Famous Dex
Ukraine - “Running Up That Hill” by Kate Bush
Rise of AI - “Yoshimi Battles the Pink Robots Pt. 1” by The Flaming Lips
Colombia’s new drug policy – “Don’t Sniff Coke” by Pato Banton
US telling on India for killing Hardeep Singh Nijjar – “Exposing me Remix” by FBG Duck
Elon Musk unravels – “Where Is My Mind?” by Pixies
Chinese spy balloon – “Somebody’s Watching Me” by Rockwell
Biden-Xi meeting – "Bad Idea Right" by Olivia Rodrigo
The Black Sea grain deal – "Is It Over Now? (Taylor's Version) by Taylor Swift
Biden runs for president (again) – “Never Gonna Give You Up” – By Rick Astley
Putin survives Prigozhin revolt -- "Houdini" by Dua Lipa
Putin to Lukashenko – “Lil Boo Thang” by Paul Russell
North Korea fires more missiles for attention – “I’m Just Ken” by Ryan Gosling
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An Argentinian flag waves outside the Casa Rosada Presidential Palace ahead of the November 19 runoff election, in Buenos Aires, Argentina November 15, 2023.
It’s gonna be a nail-biter in Argentina
Would you promote an economy minister to be president if he’d delivered 140% inflation? You might if the other option was “shock therapy.” That’s the choice facing Argentines this Sunday as they vote in a runoff election between Sergio Massa, the economy minister of the ruling party, and libertarian wildcard candidate Javier Millei, who wants to “blow up” the country’s political lethargy.
Polls show that the word most often associated with Milei is “crazy,” but that hasn’t hurt him in the topsy-turvy world of Argentine politics.
Milei’s combative public persona and radical proposals to fix Argentina’s perpetually floundering economy – including dollarizing the economy, shutting the central bank, and slashing government spending by 15% of GDP – appealed to voters disaffected with politics as usual.
He has risen rapidly from a fringe outsider to taking second place in the first round of voting – Milei garnered 30% of votes to Massa’s 37%, and while Massa did better than expected, he fell short of winning outright.
Pre-election polls point to a close contest in the second round. One particularly effective tactic for Massa has been reminding Argentines accustomed to extensive subsidies how much more their bus commute or clinic visit would cost if Milei fires up his fiscal chainsaw. Both campaigns have dived headfirst into artificial intelligence, with an especially memorable deepfake showing Milei discussing how a free market for human organs would work.
If Milei does come out on top, he'll lack the majorities in Congress he needs to pass his boldest proposals. Policy paralysis is not a recipe for taming inflation. Massa would have a freer hand with the largest factions in both houses and has promised to re-engage with the International Monetary Fund, but he’s not likely to systematically reform the state to put the budget on a solid footing. For the 40% of Argentines who have slipped into poverty, that means money is likely to stay tight whoever wins.Russian President Vladimir Putin speaks after signing bilateral documents with his Kazakh counterpart Kassym-Jomart Tokayev in Astana, Kazakhstan November 9, 2023.
Putin is unrestrained both at home and abroad
Despite moves to isolate Moscow economically and politically following its February 2022 invasion of Ukraine, the two-year anniversary of the war looms. Russian President Vladimir Putin maintains a firm grip on power, and Moscow continues to operate in unrestrained ways both at home and abroad.
On Tuesday, Putin approved new restrictions on media coverage ahead of Russia’s presidential elections next March. The Russian leader, who has already taken myriad steps to squash the free press in Russia, is expected to run for a fifth presidential term.
Much of the country’s independent media has gone into exile since Russia invaded Ukraine and the Kremlin accelerated its crackdown on free expression and dissent. Putin signed a law not long after the invasion that barred spreading “false” information on the military, effectively criminalizing criticism of the war. In Putin’s Russia, journalists who’ve provided accurate reporting have ended up imprisoned and in some cases killed.
Under the new rules, only journalists employed by registered media outlets can cover Central Election Commission sessions. The law also imposes restrictions on the coverage of commission activities at military bases and areas under martial law. The changes appear unlikely to drastically change an already undemocratic process that has helped Putin retain power for 24 years but are yet another sign that the 71-year-old Russian leader is taking steps to stay in the Kremlin.
Meanwhile, Russia continues to skirt US-led economic sanctions designed to cut off oil revenue that helps fuel Moscow’s war machine. Ukraine’s allies have capped Russian oil barrel sales at $60, but Western officials told the Financial Times that almost no oil from Russia is sold under that limit. Russia has found various ways to circumvent the cap, including via the help of a “shadow fleet” of oil tankers that employ deceptive tactics and have murky ownership.
Ukraine pushed to the back pages: As support for Ukraine slips in the US, there are concerns in Kyiv and Washington that Putin is benefiting from attention being diverted by the Oct. 7 attacks and Israel’s campaign to eradicate Hamas in Gaza.