What We're Watching: Russia-EU pipeline repairs, AMLO in the (White) House, Sri Lanka's new leader

Will Russia turn the taps back on?

“Trust us,” Russia is saying, “we’re just doing routine maintenance.” Moscow has just shut off its Nord Stream 1 pipeline, a major source of natural gas for Germany, for 10 days of summer repairs. Annual checkups to these pipelines are normal, but this is no normal year. Berlin worries the Kremlin might leave the pipes closed as a way to retaliate against the EU for the bloc’s Ukraine-related sanctions. Nord Stream 1 carries about 55 billion cubic meters of gas annually to Germany, equaling about half of the country’s yearly consumption. If Moscow keeps the line shut, Europe would struggle to store up enough gas supplies ahead of next winter. Natural gas prices in Europe are already soaring, and although the EU is moving to wean itself off of Russian energy, any further shortfalls would further stoke already-high inflation, with unpredictable political consequences across the continent. Putin, of course, knows this. Keep an eye on that “closed for repairs” sign hanging on Nord Stream 1.

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Biden meets AMLO

Mexico’s President Andrés Manuel López Obrador, popularly known as AMLO, visits the White House on Tuesday for a sit-down with US President Joe Biden at a time when ties are tense. López Obrador has recently irked the Biden administration by calling US support for Ukraine a “crass error” and by skipping the US-hosted Summit of the Americas because the White House didn’t invite the authoritarian leaders of Cuba, Venezuela, and Nicaragua. Washington, meanwhile, has irritated AMLO with criticisms that he’s undermined the independence of some of Mexico’s governing institutions and hasn’t done enough to protect journalists’ lives. Still, the two men will try to make progress on two key issues. On immigration, Mexico still allows the US to deport non-Mexican migrants back into Mexico under the controversial Title 42 policy, but in exchange AMLO wants Biden to authorize more work visas for Mexicans and Central Americans – perhaps a tough sell for a Democrat in an election year. Trade too will figure in the meeting: Washington is concerned about Mexico’s loose adherence to environmental and labor standards in the US-Mexico-Canada free trade deal (the NAFTA 2.0 pact that Trump negotiated in 2020.)

Date set for new Sri Lankan president

Sri Lanka’s parliament will select a new caretaker president from among its own ranks on July 20, in hopes of calming the worst political, economic, and social crisis in the island nation’s history. To clear the way for that, the current president and prime minister will both resign on Wednesday. The moves come after protesters furious about a nosediving economy and high prices for food, fuel, and medicine stormed the leaders’ residences over the weekend. Whoever is tapped to lead the country now will face daunting challenges: the most immediate is to secure an IMF rescue package, but beyond that to re-establish trust in the government and place the country’s tourism-dependent economy back on firmer footing as the pandemic recedes. In May, the country allowed the first sovereign debt default in its history, the result of government mismanagement of foreign currency reserves, which now hardly exist at all.