If Donald Trump were to win the US elections and become president in January, he could strike a deal with Vladimir Putin over Ukraine and Iran. This may be the scenario that Benjamin Netanyahu is hoping for. It may not be what the US voters decide, nor what the Europeans had in mind.

Geopolitics is about spheres of influence and relative power amongst nations. Proxy wars allow large powers like the US and Russia to measure their relative strengths in parts of the world far away from their voters. China has chosen economic rather than military engagements abroad as their way to convey power internationally. This may change if they decide to invade Taiwan.

Not only are international powers striving for influence. Regional powers are demonstrating their prowess by interfering in affairs of neighbouring countries either politically, economically or militarily as part of a quest for regional dominance. Lebanon is a prime example where Saudi Arabia, Iran and Syria all play their role. Thanks to Israel at its border, it also offered some international leverage with western powers.

One of the regions that is about to grow in strategic importance for such geopolitical power battles is the Arctic. We have been writing about the significance of the Arctic for Russia’s sphere of influence already years before its war in Ukraine. The melting of the ice and the new power balance since Russia’s invasion has increased its significance.

Liselotte Odgaard, a senior fellow at Hudson Institute, gave us a reminder of what is at stake in her article for Politico. She warns that China and Russia have been working on a strategic foothold in the region for more than a decade and that the US and European states are ill prepared for the security implications.

The Arctic is important for Russia to credibly threaten the US with nuclear weapons. In a nuclear exchange, Russia could fire missiles from its submarine bases near the Kola Peninsula into the poorly surveyed airspace of Greenland. Low visibility also makes those missiles hard for Nato and the US to detect and counter those strikes. Since its invasion of Crimea, Russia has been building up its military but also economic capacities there. Arctic states in Europe have their priorities elsewhere, however.

A recent joint venture between Russia’s state-owned nuclear energy firm Rosatom and China’s Hainan Yangpu NewNew Shipping company means that the two countries will now cooperate on building infrastructure and ice-class container vessels to operate a year-round Arctic route. Their cooperation could challenge Nato forces, whose infrastructure in the Arctic is not prepared for hybrid warfare.

The only Arctic-adjacent Nato states that are sharing significantly in the security burden are Canada, Norway and Denmark. Iceland completely relies on the US for its security, Finland and Sweden have their focus on the Baltic sea, and the UK already struggles to fulfil its AUKUS obligations under the nuclear submarine contracts with the US and Australia. Most of them are small countries with a defence budget that is not up for the challenge.

All those investments into icebreakers, submarines, unmanned vehicles, and communications and data infrastructure cost money. It comes while many defence budgets are focused on bolstering Ukraine against Russia. A strategic rethink for the Arctic does not have the urgency of the war in Ukraine, but it too needs long-term planning.

One of the most effective ways you can deal with illegal migration is to open up more channels for migration of the legal kind. Whether it’s more work visas or asylum programmes, giving people better odds of finding their way to your country safely and legitimately reducing the chance of them doing it otherwise. It acts as a way to regularise people who might have arrived illegally before, bolstering integration. For Europe’s ageing populations, bringing in migrants is also a necessity, as is ensuring they are integrated properly.

This is the theory at least behind the approach Giorgia Meloni’s government has taken so far. A tougher approach to boat crossings, and third-country deals, has been balanced with attempts to open up legal migration. The Italian government has already increased its annual quota for non-EU work permits. Now it wants to pass a new law that will simplify other elements of the process.

The new decree, approved in cabinet yesterday, aims to alleviate the bureaucratic nightmare that can accompany the process of applying for work permits. It used to be that there was one day of the year where an employer could apply for a work permit online: click day, in Italian. You can imagine what this does to the IT system tasked with handling the requests.

Now the idea is to open up multiple application points through the year. According to Alfredo Mantovano, the Italian Cabinet Secretary, the eventual aim is to get rid of them altogether: going from a beaten-up old car to a Maserati, in his words. Another major change is giving workers already in Italy another 60 days in the country to find a new job once the contract they entered Italy under expires.

The question, however, is whether the Italian government has done enough. Simplification is helpful. So is increasing quotas. But Italian work permits are still massively oversubscribed. Meloni’s government has made 425,000 work permits available for the 2023-2025 period. That is about two-and-a-half times the previous period’s figure. But, at the time, the government estimated that there would be almost two applicants for each permit. For the first year alone, about 600,000 employers signed up early.

This suggests that the carrot side of the carrot-and-stick approach is not quite generous enough. It is also a problem for Italy’s wider economy, which is practically screaming for labour in some places. Istat’s latest unemployment figure, for the month of August, is 6.2%, the lowest it has been since 2007. Italy’s labour force participation rate is now well above pre-pandemic levels too. This is, of course, the national average. In several regions of northern and central Italy, including Lombardy, Veneto, Tuscany, and Emilio-Romagna, unemployment has dropped to full-employment levels.   

After Israel killed Hassan Nasrallah, Hezbollah's leader, last week, Iran retaliated by sending 180 missiles towards Israel last night. Most missiles were intercepted by various air defence systems and in cooperation with allied forces. Only a few were reportedly injured by falling shrapnel.

By attacking Israel directly, Iran gave in to the pressure to act, and abandoned its principle of getting directly involved in Israel’s war. Up to this point, it has preferred to leave this to militias it backs in Lebanon, Iraq, Yemen, and Gaza. With Hezbollah seriously incapacitated by Israel’s attacks, however, Iran stepped in at last to preserve their alliance. Now they stand front-and-centre against Israel and the US. Where will this conflict go from here?

On the face of it, the attack was about restoring Iran’s image of power. Iran sent more ballistic missiles than in its attack on Israel in April. According to the Iranians, it also included hypersonic missiles for the first time. As was the case in the April attack, it is not necessary for those missiles to hit their targets in Israel. Just the demonstration of their capacities alone is enough for its supporters to cheer. It is intended as a signal that the axis of resistance, or ring of fire as they call Iran and its proxy militias in the region, that they are not deterred by Israel’s military superiority.

But behind the scenes, the relationship between Iran and its militias is changing. Nasrallah mismanaged the conflict and Hezbollah paid a high price for it. Iran had to step in, even if they wanted to stay out. The rules of the game are changing as the conflict evolves. It is now up to Israel to decide on the next step. 

In Lebanon, the crucial question is whether the people will rise against Hezbollah or side with them. The more Israel’s operations resembles previous invasions on their land, the more Lebanese people will see Hezbollah as on their side too. Striking a cease-fire deal with Lebanon would prevent further radicalisation, but that would have to involve some recalibration of power between the different sectarian groups in Lebanon as a precondition. 

Israel promised a significant retaliation against Iran for last night’s missile attack in the coming days. All options are on the table, but Israeli officials said that it will be more significant than Israel’s limited response to Iran’s attack in April. They may aim for some oil refineries, or even Iran’s nuclear facilities or targeted assassinations. Iran promised to escalate its response if Israel were to attack.

How far could this escalation go? There is a bigger conflict on the horizon. Russia may enter the scene, due to its shared interests with Iran. Or China. For both Russia and China, the conflict represents an opportunity to enter the region, especially if western allies make a mess of it.

The IDF has started its ground invasion of Lebanon. Israel's stated objective is ensuring that 65,000 Israeli citizens can return to their homes and live in safety close to the Lebanese border. This is a crucial moment of escalation in Israel’s military operations. Neither the UN nor the Biden administration in the US seem to have any leverage to stop the escalation and violation of international law.

Over the past week, air strikes killed over 1200 in Lebanon, including the head of Hezbollah and several of its senior commanders and many civilians. Israel sent text messages and flyers to people in South Lebanon telling them to evacuate their homes. There are now over 1m people displaced inside Lebanon. Depending on how long Israel’s invasion last and what its ultimate goal is, those people will have nothing to return to.

Israel widened its war goals from Gaza to Lebanon, with Iran looming next. Over 24 hours, there have been simultaneous strikes in Gaza, Syria, Yemen, and Lebanon. At display is Israel’s technological superiority and highly sophisticated infiltration of Hezbollah, intended to send a message to every resistance organisation in the region: don’t even dare to attack us again. This is Israel’s deterrence strategy, using force as the first and ultimate response.

Israel may achieve a military victory by destroying Hezbollah’s capacities to strike. But how can this lead to a different future than past invasions? As it always is with the all-powerful and the powerless, the latter will find other ways to compensate for their lack of power to defend their land. As long as Israel is not ready to acknowledge their borders and sovereign rights, terrorists will have a cause to fight for, and Hezbollah will have a reason why it cannot disarm. 

Nearly one year after the 7 October terror attack, Israel seems determined to continue its war against all militia groups in the region. Benjamin Netanyahu’s war rhetoric and military campaigns are incensing, humiliating, and provocative to its adversaries, with all blame pointing to Iran. Iran is refraining from retaliation for now, out of weakness, but perhaps also strategically. But for how long? Russia has entered the scene and could come to help Iran. What if there is a nuclear weapons deal that turns Iran into another North Korea? It is not such a far-fetched scenario.

Not only are there geopolitical implications, it could also affect US itself. The US is sending a few thousand troops to the Middle East to defend Israel if necessary. With the upcoming elections there in about 5 weeks, the military escalation could boost the chances of Donald Trump over Kamala Harris. Will Israel decide on the outcome of US elections? If Trump were to win those elections, we are likely to enter a larger geopolitical game of power and influence, with Russia and China on the other side.

A trial starts today against Marine Le Pen over an EU parliament assistants affair. Le Pen and 26 other former and current French politicians and MEPs stand accused of embezzling EU funds to finance assistants who worked for Le Pen’s party in France rather than on EU affairs which they were paid for. The allegations cover payroll finances over the 2004-2016 period. Le Pen has repeatedly denied any wrongdoing. In its defence, the Rassemblement National argues that there are cultural differences between France and the EU at play: in French political parties being paid is the exception, and voluntary work is the norm. Being an assistant and party member are thus not a muddled affair but should also not be incompatible as such.

A guilty verdict could be a game changer for the party. If Le Pen is found guilty after a two month trial, it could jeopardise her presidential election bid in 2027. She could face a maximum sentence of 10 years behind bars and €1m in fines. She also could be barred from public office for five years, which would prevent her from running in the presidential elections.

Le Pen counts on using this trial to her advantage. Could what worked for Donald Trump work for her in Europe? Le Pen is a former attorney, and counts on being present as much as possible during the trial. She will get maximum media coverage, and a free opportunity to stylise the trial as an attempt to shut herself and her party out of power. Even in a case of a guilty verdict, the consequences are considered manageable according to the party and herself. No one is irreplaceable, and Jordan Bardella has what it takes to take over, Le Pen assures.

Those trials, as justified as they may be, can backfire politically at the national level. We have seen in the case of Trump how he gathered strength and support through all his trials. It can also pitch national interests against European ones. The base of staunch Le Pen supporters could grow. And, if found guilty, it might prepare the path for Bardella to run in the next presidential elections. What it will most certainly not do is to shrink the support for the far-right in France or in Europe.

Volodymyr Zelensky did not get what he came for - a victory plan. He got some glide bombs and another battery of Patriot missiles, and some $5.5bn in security assistance by the end of the year, plus a further $2.4bn beyond.

The political reality is that neither the US nor Germany, Ukraine’s two largest supporters, are willing to risk an all-out war against Russia by giving Ukraine what it would need to achieve a Russian retreat from its occupied territories. But for now they will be supporting Ukraine in the attempt to stem against Russia’s advance. The US elections are probably not going to be the pivotal moment that people expect. The big shift already happened some time ago.

We agree with Timothy Garten Ash’s assessment it would take a big immediate shift in western support for Ukraine to achieve any outcome that can plausibly be called victory. We concluded some time ago that this big shift is not going to happen. We also agree with his assessment that Kyiv will probably be forced to agree to unfavourable terms to end the hostilities at some point next year. 

But we think it is wrong to frame this debate in terms of victory and defeat as if no other options exist. Victory for Ukraine is defined in terms of Russia retreating from all occupied territories. Defeat is framed as a complete Ukrainian surrender: Russia's annexation of four oblasts, the military disarmament of the Ukrainian state, and no Nato membership. Virtually every realistic option sits between the two.

What can stop a war in Lebanon? Israel’s military is getting ready for a ground invasion after a pager and walkie talkie attack targeting Hezbollah members last week and an intense three-day bombing this week that has killed at least 600 people. Hezbollah launched in response a projectile at Tel Aviv, the first time it has ever done so. More than 90,000 have been displaced within Lebanon already. The US and the UK have sent troops to Cyprus, where the UK maintains a large airbase, to prepare for an emergency evacuation from Lebanon.

A ground invasion may only be one of those credible threats used by Israel as part of ongoing negotiations. Entering Lebanon would be madness for Israel and play into the hands of Hezbollah, which has been training for this kind of guerrilla-type war. It would get the Lebanese army involved too, as well as external powers like Iran. Iran so far refrained from retaliating against Israel for the killings of senior commanders. But a war in Lebanon could force them to enter the conflict more directly.

Over the past several days, Israel demanded that Lebanese living in the south evacuate as they extended their operation in that part of the country. Israel wants to secure a corridor inside Lebanon across the border so that around 65,000 Israeli citizens can safely return to their homes near the border. Hezbollah has said it will stop its strikes if Hamas agrees to a Gaza ceasefire. But it is not only about that. The borders between Lebanon and Israel has never been properly settled even after Israel stopped its occupation of southern Lebanon in 2000. The idea that the Lebanese are to give up their land to ensure that Israelis can live close to the border was repeatedly rejected by Lebanon. So was Israel’s grip on a small piece of land, the Shebaa farms, which it occupies and claims as part of the Golan Heights. 

Yesterday at the UN General Assembly, France and the US gathered support behind their call for a 21-day ceasefire with a plan to settle the Lebanon-Israel border issue. Their plan is supported by the EU, Saudi Arabia, Qatar, the UAE, Australia, and Japan. No details have emerged about those plans, so it is impossible to judge how serious they are. It is likely to be rejected by Hezbollah if it infringes on the sovereignty of Lebanon. We are still in the upping the ante phase, driving up the price for any settlement. And the west looks too weak to make an offer none of the sides can refuse. The least they could to to map out a path forward of what can be done rather than focussing on all those red lines.

The EU’s big green fight, over the 2035 fuel-driven car ban, is yet to come. But the first step is what will happen to Europe’s intermediate emissions targets. Even more so than the 2035 ban, this is the concern for a number of car companies, and governments. Now Robert Habeck is amongst those calling for a review of the EU’s car emissions targets, due for 2026, to be brought forward to 2025.

Doing this would allow the union to alter its 2025 target for a 15% average emissions reduction across automakers’ newly sold cars. The 2025 target is a big worry amongst a number of car manufacturers in Europe because low demand for their electric cars has hit their ability to reach the target. Habeck did not say that he was in favour of doing this. But it would be the clearest rationale for moving the review date forward.

A paper from Renault, whose CEO leads the European carmakers’ association, ACEA, estimated that electric cars in Europe would need to achieve a market share of 20-22% to reach the 2025 target. At the moment, it is more like 15%. This potentially exposes them to fines in the tens of billions of euros.

There are two interesting things about Habeck’s intervention. One is that Germany’s most prominent Green politician is doing this at all in the first place. Another is that Habeck suggested moving the review forward whilst also defending the 2035 ban. According to him, axing the ban would throw the EU’s overall target of net zero emissions by 2050 into doubt.

One possible rationale for moving the review date is that meeting the car companies, and their political backers, halfway might buy some capital for keeping the 2035 ban in place. This makes some economic and political sense. Carmakers and governments would still have a decade to sort out both supply chains and incentives for increased electric car uptake. Focusing on this longer-term goal, from where we are now, might make more sense than the intermediate targets.

Another possibility is that this helps Habeck expand his own options domestically. If, as looks likely now, the CDU becomes the largest party after next year’s German elections, it will need to go looking for a coalition partner. Our own assessment is that the CDU’s preference would be for another grand coalition, with the SPD. But Habeck may want to keep the Greens palatable enough, to see what can happen.

It is easy to give lectures people on human rights, but far more difficult to implement policies. Every union has its rules. So does the EU and the Council of Europe. But as the number of rulings increase over time and with it the number of those flouting them, the question is where this is all heading towards. We already have a rule-of-law crisis within the EU where deliberate non-compliance resulted in fines for Poland and Hungary. Politicians who opposed the rulings have gained political credit from voters.

We had a look at a recent study by Democracy Reporting International (DRI) and their findings on how the rulings of the two courts, the European Court of Human Rights (ECtHR) and the Court of Justice of the European Union (CJEU), have been implemented in member states. Their work focussed on leading rulings, how well EU member states were implementing them, and how long those implementation phases can be.

The ECtHR and the CJEU set out pan-European standards for effectively upholding Europe’s constitutional values of democracy, human rights, and the rule of law. The ECtHR can be accessed by anybody who considers their human rights infringed, after meeting certain filing criteria. The remit of the CJEU is narrower, focussing more on conflicts of interpretation of EU law. It checks preliminary legal questions sent from courts in EU member states, and hears infringement cases that the European Commission brings against member states.

Over the past five years, the role of those two courts increased significantly with the EU’s rule-of-law crisis, minority rights cases, and the war in Ukraine. In addition to that, a recent ruling also found that European countries have an obligation to mitigate negative climate change effects. How well those rulings though are implemented in member states is another matter. Despite the courts' increasing importance, there is ignorance, unwillingness, and even active resistance from national authorities to implement their rulings. 

The report is too long to summarise here, but some observations are intriguing. As of 1 January 2024, there were 624 leading ECtHR judgements waiting to be implemented in member states. Of those 14.5% have been pending for more than 10 years, while the average time for implementation is around 5 years. In 2023, 44% of their cases have been pending implementation, many of those relating to structural human rights violations. Hungary leads the list with the highest rate of non-compliance, 76% in 2023, followed by five other struggling implementers. Eleven countries have good to excellent implementation records, led by Sweden.

As for the CJEU, only around half of the rulings, 110, that were issued within the past five years have been fully complied with. There is no or partial compliance for 71 judgements and, of these, 60% have been pending for two years or more. Some national constitutional courts challenge the CJEU’s authority directly, like in Poland and Romania, while others like Hungary do it more indirectly. Finland and Sweden also qualify as struggling compliers, though there were only 1 or 2 cases in the sample. About five countries qualify for good compliance, including Italy with a record number of 34 cases.

Politically, it matters how those differences will be instrumentalised and how they are used in order to nurture a narrative of us-against-them. It is a domain where the far-right and nationalist parties are active. And it is good to have it on the radar screen as an indicator of where conflicts are potentially brewing.

Floods resulting from Storm Boris caused thousands to flee their homes in Italy, the Czech Republic, Austria, Poland, Hungary, and Romania. The floods are already considered as one the most expensive climate events by Gallagher Re, a reinsurance firm. Insurers are expected to pay out between €2bn and €3bn for the damage caused. This only covers a tiny fraction of the actual damage. Most of the bill will have to come from the EU and the governments.

Ursula von der Leyen put €10bn on the table from the cohesion funds to cover those uninsured and to provide relief for the most affected areas. Half of those funds will go to Poland, though governments will have to chip in too. The Polish finance minister said that they will revise their 2024 budget upwards once the final bill is known. Austria has tripled its fund for victims of natural disasters to €1bn. Prague will release €1.2bn this year and another €400m next for reconstruction.  Another year for budget deficit exemptions.

Those emergency measures show how unprepared private and public insurers are for climate change events like these. Between 1980 and 2022, those climate events cost €650bn measured in constant euros, but only 19.5% of losses were insured, according to a report by the European Environment Agency (EEA). Over the past two years the damage reached €110bn alone. Not all countries are covered by insurance. In Italy only 5% of the losses over the past two decades were covered by insurance, compared to 7% in Poland, 12% in Czech Republic, and 17% in Austria. Denmark tops the list as the highest protection granted, with 61% covered.

Underinsurance has become a structural issue for climate change events like floods, fires, and droughts. What if natural disasters become the new normal? Will insurance premiums rise beyond what people can afford? How is the burden sharing between the EU and national governments supposed to work if climate change events are not a one-off, but an annual occurrence? When extreme risks become more common, it also has redistributional effects inside a country. For example, those living closer to rivers find that their house prices are falling and insurance premiums are rising. Drought-prone regions in the south lose out against lusher regions in the north. New pressures are about to build up.