Turbulence in Europe and the Israel-Hezbollah ceasefire is shaky
Andrew Sheves Good morning.
There are three big stories worth tracking today, but first, it’s worth pulling a few of these together.
Comment
The macro trend at the moment is increasing turbulence and weakness across Europe through a confluence of factors: internal political wrangling (France, below), economic difficulties (Germany), Russian hybrid warfare (telecoms sabotage, below), and the seeming undoing of the ‘color revolutions’ as eastern european countries drift back towards Moscow (e.g., Georgia).
Added to this are uncertainties over US tarrifs and the deal Donlad Trump will push on Ukraine to end the war making for a very uncertin 2025 with respect to Europe.
The ceasefire between Israel and Hezbollah looks increasingly shaky. Israel has conducted daily strikes against Hezbollah, accusing the group of not sticking to the terms of the truce. Hezbollah responded in kind on Monday with a “warning strike” that resulted in multiple retaliatory Israeli airstrikes, killing nine. [SOURCE - Al Jazeera]
Another telecommunications cable in Europe was damaged in what polic suspect was criminal behavior. The cable between Finland and Sweden was severed on Monday, causing an internet outage [Source - Euronews] This follows other recent attacks on infrastructure in the Baltics which Sir Richard Moore, head of the UK’s MI6, has called part of a “staggeringly reckless campaign of Russian sabotage in Europe”. [Full speech text]
There will be a vote of no-confidence in the French Parliament on Wednesday, which seems likely to collapse the current government. This makes it extremely unlikely that France will meet its end-of-year budget deadline creating huge uncertainty over the direction of the French economy. [SOURCE - Bloomberg]
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