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Israel's Covert Nuclear Rise

Israel’s emergence as a nuclear power is one of the most secretive and controversial developments in modern geopolitics. While the country has never officially confirmed or denied possessing nuclear weapons, it is widely believed to have developed a sophisticated nuclear arsenal. This article explores the key milestones and strategies that enabled Israel to become a nuclear power while maintaining a policy of deliberate ambiguity.The Early BeginningsThe origins of Israel’s nuclear program trace back to the 1950s, shortly after the nation’s establishment in 1948. In 1952, the Israel Atomic Energy Commission was created, led by Ernst David Bergmann, a scientist who saw nuclear weapons as essential for Israel’s survival amid regional threats. The young nation, surrounded by hostile neighbors, sought a deterrent that could ensure its security.A critical step occurred in the late 1950s when Israel began constructing the Dimona nuclear facility in the Negev desert. With significant assistance from France, which provided technology and expertise, the facility was built under a veil of secrecy. Officially labeled a "textile factory," Dimona became the heart of Israel’s nuclear ambitions. By the mid-1960s, it is believed that Israel had produced its first nuclear weapon, though no official records confirm this timeline.The Policy of Nuclear AmbiguityCentral to Israel’s strategy is its policy of "nuclear ambiguity." This approach avoids explicit confirmation or denial of nuclear weapons possession, allowing Israel to maintain deterrence without triggering an arms race or international backlash. Israeli leaders have adhered to this stance for decades, rarely commenting on their capabilities. However, in 2006, then-Prime Minister Ehud Olmert briefly listed Israel among nuclear-armed states in an interview, a rare slip that was swiftly minimized.The Whistleblower’s RevelationThe secrecy surrounding Dimona was shattered in 1986 when Mordechai Vanunu, a former technician at the facility, leaked photographs and details to the public. His revelations suggested that Israel possessed between 100 and 200 nuclear warheads, confirming suspicions about its capabilities. Vanunu’s actions led to his abduction by Israeli intelligence and an 18-year prison sentence, underscoring the lengths Israel would go to protect its nuclear program.Advanced Delivery SystemsIsrael’s nuclear arsenal is thought to be supported by a range of delivery systems. The Jericho series of ballistic missiles, initially developed with French assistance, can reportedly carry nuclear warheads over thousands of kilometers. Additionally, Israel’s fleet of Dolphin-class submarines, acquired from Germany, is rumored to be equipped with nuclear-tipped cruise missiles, offering a second-strike capability that enhances its deterrence.International Stance and Regional TensionsIsrael has never joined the Nuclear Non-Proliferation Treaty (NPT), a decision that has drawn criticism, especially from regional rivals like Iran. Israeli officials maintain that they will not be the first to introduce nuclear weapons into the Middle East, a statement crafted to preserve ambiguity. In recent years, tensions with Iran over its nuclear program have spotlighted Israel’s own capabilities, with Israeli leaders advocating strong measures to prevent Tehran from achieving similar status.A Lasting LegacyIsrael’s journey to nuclear power relied on strategic partnerships, covert operations, and a steadfast commitment to secrecy. While the full scope of its arsenal remains undisclosed, its status as a nuclear power is rarely questioned today. This reality continues to influence Middle Eastern geopolitics, shaping both regional dynamics and global efforts to curb nuclear proliferation.

Spain defies NATO's 5% goal

Spain has recently taken a bold stance by rejecting the North Atlantic Treaty Organization's (NATO) proposal to increase defense spending to 5% of its Gross Domestic Product (GDP). This decision has ignited debates across the international community, questioning Spain's dedication to NATO and the alliance's future defense strategies.Background of the proposalAt a recent NATO summit held in The Hague, member states deliberated a significant proposal to elevate defense spending to 5% of GDP by 2035. Championed notably by the United States under President Donald Trump, this increase aimed to counter escalating security threats, particularly from Russia. However, Spain, under the leadership of Prime Minister Pedro Sánchez, has firmly opposed this target, highlighting a clash of priorities within the alliance.Reasons for Spain's rebellionSpain's economy faces challenges with a high debt-to-GDP ratio and persistent budget deficits. Committing to a 5% GDP defense spending target would necessitate severe cuts in critical sectors such as healthcare, education, and social welfare. Prime Minister Sánchez has labeled this potential shift as "unreasonable and counterproductive," stressing that it could destabilize Spain's economic recovery and social cohesion.Strategic perspectiveGeographically distant from Russia's borders, Spain perceives less immediate threat compared to Eastern European NATO members. This distance influences Spain's defense priorities, leading Sánchez to argue that Spain can fulfill NATO's capability requirements efficiently without adhering to the proposed spending hike. He advocates for resource allocation based on strategic necessity rather than a uniform percentage.Reactions and repercussionsSpain's stance has elicited mixed responses. Within NATO, some member states and U.S. officials have voiced concerns, suggesting that this could undermine the alliance's collective defense strength and signal vulnerability to adversaries. President Trump has even hinted at retaliatory measures, such as imposing higher tariffs on Spanish exports.Conversely, Spain stands firm, proposing a more tailored approach to defense contributions. Sánchez suggests that NATO should assess member contributions based on specific defense needs and capabilities, promoting fairness and flexibility across the alliance.Broader implicationsThis rebellion underscores a growing rift within NATO regarding defense spending priorities. It challenges the alliance to reconsider how it measures and distributes defense responsibilities, balancing collective security with the diverse economic realities of its members. Spain's position could prompt a broader dialogue on adapting NATO's strategies to contemporary global security demands.Conclusion of allSpain's rejection of NATO's 5% GDP defense spending target reflects a complex interplay of economic limitations, strategic considerations, and political resolve. While it has strained relations within the alliance, it also opens the door for NATO to refine its approach, ensuring resilience and unity in addressing future threats.

Geopolitics: Peru's balancing act

In the evolving landscape of global politics, the competition between the United States and China for influence and control has become increasingly pronounced. This rivalry is not confined to their own borders but extends to regions across the world, including Latin America. Peru, a country rich in resources and strategically located on the Pacific coast, has found itself at the center of this geopolitical tug-of-war. Far from being a passive player, Peru has been actively engaging with both superpowers, leveraging its position to advance its own interests and secure its place in the new world order.Peru's Strategic ImportancePeru's strategic importance is underscored by its vast natural resources, including significant deposits of copper, gold, and silver, which are crucial for global industries. Its location on the Pacific coast makes it a key gateway for trade between Asia and Latin America. Moreover, Peru's active participation in regional organizations like the Pacific Alliance and its hosting of international events like the APEC summit highlight its growing influence in the region.Strengthening Ties with ChinaChina has been steadily increasing its presence in Peru, particularly through investments in the mining and energy sectors. The construction of the Chancay mega-port, a project led by Chinese state-owned companies, is set to transform Peru into a major trade hub between Asia and Latin America. This port is expected to significantly reduce shipping times and costs, thereby boosting Peru's economy and enhancing its role in global trade.Deepening Relations with the USAThe United States, a long-standing partner of Peru, has also been actively engaging with the country. The Peru-United States Trade Promotion Agreement, which came into effect in 2009, has facilitated trade and investment between the two nations. Additionally, the USA's Americas Partnership for Economic Prosperity aims to promote economic competitiveness in the region, including Peru. However, the USA has also expressed concerns about China's growing influence in Peru and other Latin American countries, viewing it as a potential threat to its own interests.Navigating the Superpower RivalryPeru has been carefully navigating the competition between the USA and China, striving to maintain good relations with both while advancing its own interests. By signing free trade agreements with both powers and welcoming investments from both, Peru has positioned itself as a neutral player in this geopolitical rivalry. Moreover, Peru's active participation in regional organizations like the Pacific Alliance demonstrates its commitment to regional cooperation and integration, which can serve as a counterbalance to the influence of external powers.Challenges and RisksHowever, Peru's strategy is not without risks. The country must carefully manage its relations with both the USA and China to avoid becoming overly dependent on either. Additionally, as the competition between the two powers intensifies, Peru may find itself caught in the crossfire, facing pressure to choose sides. Nevertheless, Peru's pragmatic approach and its focus on regional cooperation suggest that it is well-positioned to navigate these challenges and secure its place in the new world order.Conclusion of allIn conclusion, Peru's strategic importance and its proactive engagement with both the United States and China have positioned it as a key player in the new world order. By leveraging its resources, location, and regional influence, Peru has managed to navigate the competition between the two superpowers, advancing its own interests while maintaining a delicate balance. As the global landscape continues to evolve, Peru's role is likely to become even more significant, underscoring the importance of its pragmatic and forward-looking approach.

Azerbaijan defies Russia

Since the death of two Azerbaijanis in Russia, the conflict between the two countries has escalated. Since the war in Ukraine, Baku's autocrat Ilham Aliyev has been acting much more confidently towards Moscow. Relations between Azerbaijan and Russia, which for years were characterised by pragmatic cooperation, have deteriorated dramatically in recent months. The conflict unfolding in the Caucasus has far-reaching geopolitical implications and could permanently alter the balance of power in the region.Background to the relationsRelations between Azerbaijan and Russia have long been characterised by mutual benefit. Russia was considered the protective power of Armenia, Azerbaijan's neighbour and rival, but at the same time Moscow maintained economic and political ties with Baku. Azerbaijan, rich in oil and gas reserves, played a key role in regional energy policy. However, this balance was upset when Azerbaijan strengthened its independence from Russia after its victory in the Nagorno-Karabakh conflict in 2023 and established closer relations with Turkey and the West.Trigger for the current tensionsThe current conflict began with the death of two Azerbaijani brothers in the Russian city of Yekaterinburg in June 2025. The men were arrested during a raid by the Russian domestic intelligence service and died shortly afterwards in unclear circumstances. While Russian authorities claimed that the deaths were natural, an Azerbaijani autopsy revealed serious injuries, sparking allegations of torture and ethnically motivated violence. This incident sparked a wave of outrage in Azerbaijan and set off a chain of events that exacerbated tensions.Escalating eventsIn response to the incident, Azerbaijan cancelled all planned Russian cultural events and raided the offices of a Russian foreign broadcaster in Baku, arresting several journalists. Another high point was the crash of an Azerbaijani passenger plane in December 2024 on its way to Grozny in Chechnya. The accident claimed the lives of 38 people. While Russia attributed the crash to a bird strike, Azerbaijan suspects that a Russian missile was responsible. President Aliyev then threatened legal action at the international level.Reactions from both sidesAzerbaijan has strengthened its position by moving closer to the West and supporting Ukraine in its war against Russia. At the same time, the country has expanded its energy exports to Europe in order to secure its economic independence. Russia, on the other hand, sees itself weakened by the war in Ukraine and is responding with a mixture of threats and appeasement. Official spokespeople warned Azerbaijan against a deterioration in relations, while nationalist voices in Russia called for tougher measures against Azerbaijani migrants.Consequences for the CaucasusThe South Caucasus is a strategically important region that serves as a transit corridor for energy exports and connects Europe with Asia. An escalating conflict could jeopardise Europe's energy supply and undermine the stability of the region. Russia's waning influence, coupled with the growing role of Turkey and the West, is changing the geopolitical landscape. The conflict could also strain relations between Russia and Turkey, which have different interests in the region.Outlook for the political futureThe future remains uncertain. Some warn of further escalation that could lead to military confrontation. Others are counting on diplomatic solutions, possibly through mediation by international actors such as the European Union. What is clear, however, is that relations between Azerbaijan and Russia have reached a low point and that the Caucasus faces an uncertain future.

France's debt is growing

France is facing an unprecedented financial challenge. With public debt exceeding €3.2 trillion, representing more than 110% of gross domestic product (GDP), the eurozone's second-largest economy is on a dangerous path. The budget deficit is around 5.5% of GDP and is expected to rise to over 6% this year. These figures significantly exceed EU targets, which allow a maximum deficit of 3% and a debt ratio of 60% of GDP. The financial markets are becoming increasingly nervous, and interest rates on French government bonds are climbing to record levels. What has led to this debt chaos, and how can France avoid the looming abyss?The roots of the crisis run deep. For decades, France has had a relaxed attitude towards debt, which differs from the strict budgetary discipline of other countries such as Germany. During the coronavirus pandemic and the energy crisis resulting from the war in Ukraine, the government pumped billions into the economy to support households and businesses. Subsidies for electricity prices and generous social benefits kept the economy stable but led to a sharp rise in debt. Since 2017, when President Emmanuel Macron took office, public debt has grown by almost one trillion euros. Critics accuse the government of delaying necessary structural reforms, while the government's spending ratio is just under 60% of GDP – one of the highest in the world.The political situation is exacerbating the crisis. Following early parliamentary elections in the summer of 2024, parliament is fragmented and majorities are difficult to form. Prime Minister François Bayrou, who has been in office since autumn 2024, has presented an ambitious austerity programme to reduce the deficit to below 3% by 2029. The measures include the abolition of two public holidays, a freeze on pensions and social benefits, the elimination of 3,000 civil service jobs and higher taxes on high incomes. However, these plans are meeting with fierce resistance. The right-wing nationalist party Rassemblement National and left-wing parties are threatening votes of no confidence, which could bring down Bayrou's government. His predecessor, Michel Barnier, was forced to resign after only three months in office when his draft budget failed.The financial markets are watching the situation with suspicion. Interest rates on French government bonds are now exceeding those of Greece in some cases, which is an alarming sign. France spends around 50 billion euros a year on debt servicing alone, and the trend is rising. Experts warn that this figure could climb to between 80 and 90 billion euros by 2027, making investment in education, infrastructure and climate protection virtually impossible. Rating agencies such as S&P and Moody's still rate France's creditworthiness as solid, but have threatened downgrades if the deficits are not reduced.The crisis also has European dimensions. France is systemically important for the eurozone, and an uncontrolled rise in debt could jeopardise the stability of the single currency. Unlike the Greek debt crisis in 2008, when rescue funds were used, a bailout package for France would be almost impossible to finance. The EU has launched disciplinary proceedings against France to exert pressure for budget consolidation, but political instability is hampering reforms.What can France do? Bayrou's austerity plans are a first step, but their implementation is uncertain. Tax increases are politically sensitive, as France already has one of the highest tax rates in Europe. Spending cuts could slow economic growth, which is just over 1% this year. At the same time, experts are calling for structural reforms to increase productivity and reduce dependence on the public sector. Without clear political majorities, there is a risk that France will slide further into debt.Citizens are already feeling the effects of the crisis. Strikes and protests against austerity measures are on the rise, and social tensions are running high. Many French people feel caught between high living costs and impending cuts. The government faces the challenge of regaining credibility without losing the trust of the markets or the population.A way out of the debt chaos requires courage and a willingness to compromise. Bayrou has described the situation as ‘the last stop before the abyss.’ Whether France can overcome this crisis depends on whether politicians and society are prepared to make tough decisions. Time is pressing, because the financial markets will not tolerate any further delays. France is at a crossroads – between reform and risk.

Iraq vs. Iran – The end?

Since the fall of Saddam Hussein in 2003, Iran has significantly expanded its influence in Iraq, particularly through its support for Shiite militias and political parties. However, this has led to growing discontent among large sections of the Iraqi population, who are demanding greater national sovereignty and an end to foreign interference.In recent months, protests have intensified in Iraq, particularly in Baghdad and the southern provinces. The demonstrators are protesting against corruption, unemployment and, above all, Iranian influence. An impressive example of this resistance was the storming of the Iranian consulate in Karbala in October 2023, during which angry demonstrators set the building on fire. This incident underscores the deep frustration felt by many Iraqis over Tehran's perceived dominance in their country.In addition, political groups and tribal leaders in the south of the country have begun to openly reject Iranian influence. They are demanding measures to curb the activities of Iranian-backed militias, which are seen as an extension of Tehran's power. Iraqi Prime Minister Mohammed Shia al-Sudani faces a difficult task: he must balance relations with Iran and the United States while responding to his citizens' demands for independence.Iran is alarmed by these developments and is trying to strengthen its allies in Iraq. There are indications that Iranian-backed militias have increased their presence, possibly to suppress the protests or consolidate their position. At the same time, attacks on US military bases in Iraq attributed to these militias have led to retaliatory strikes by the US, further fuelling tensions in the region.The situation has not gone unnoticed internationally either. The United States, which maintains a strong presence in Iraq and wants to contain Iranian influence, is following events with great attention. Other regional players such as Saudi Arabia could also intervene to support anti-Iranian forces and influence the balance of power in the Middle East.The question remains: could this resistance be the final blow against the Ayatollahs in Iran? Some observers see it as the beginning of the end of Iranian hegemony in Iraq, but others urge caution. The Ayatollahs have proven in the past that they have considerable resilience and numerous means at their disposal to secure their influence. Nevertheless, it is clear that pressure on Iran in Iraq is growing and that events have the potential to permanently alter the balance of power in the region.

Japan's financial precipice

Japan is grappling with a dire financial crisis as interest rates have surged, doubling to a staggering 0.50%—the highest level since the 2008 global financial crisis. This dramatic shift, orchestrated by the Bank of Japan, marks the end of a prolonged era of ultra-low borrowing costs, leaving the nation teetering on the edge of economic ruin. The people, long accustomed to near-zero rates, now face unprecedented financial pressure as the cost of living soars and debt burdens mount.For decades, Japan wrestled with stagnation and deflation, a period often dubbed the "Lost Decades." Ultra-low interest rates were a lifeline, keeping borrowing affordable and sustaining a fragile economy. But that lifeline has been severed. Inflation has climbed past the central bank's 2% target, fueled by a tight labor market and rising wages. Emboldened by these signs of economic vigor, the Bank of Japan has pushed forward with its rate hikes, aiming to normalize monetary policy after years of caution.Yet, this bold move comes at a steep cost. Japan's public debt, one of the largest in the world, now looms larger as servicing costs rise with the higher rates. Households, once shielded by cheap loans, are buckling under increased mortgage and credit payments. Businesses, too, face a reckoning—many small firms, the backbone of the economy, fear they won't survive the tightened conditions. "The shift is too sudden," one economic observer noted, echoing widespread unease. "Families and companies need time to adjust, but time is a luxury we don’t have."The timing couldn’t be worse. Global uncertainties, from trade disruptions to geopolitical tensions, cast a shadow over Japan’s recovery. Some experts caution that the rate hike could choke off growth just as the economy begins to stir, plunging the nation back into the stagnation it fought so hard to escape. "We’re walking a tightrope," another voice warned, highlighting the delicate balance between curbing inflation and preserving stability.As Japan stands at this financial precipice, the Bank of Japan faces mounting pressure to monitor the fallout closely. The path ahead is fraught with risk—too aggressive, and the economy could collapse under the weight of debt; too lenient, and inflation could spiral out of control. For now, the people of Japan brace for hardship, their resilience tested once more as the nation navigates this perilous turning point.

Trump vs. EU: A good deal?

At the end of July 2025, US President Donald Trump and EU Commission President Ursula von der Leyen presented a transatlantic trade agreement at the Turnberry golf resort in Scotland, signalling a surprise agreement after months of escalating threats of punitive tariffs. At its heart is a 15% cap on almost all EU goods exported to the United States, while Brussels will in return scrap all tariffs on US industrial goods – a paradigm shift from the previous ‘zero tariff symmetry’.In addition, the European Union has committed to purchasing US energy worth 750 billion dollars by 2028 and investing 600 billion dollars in American sites. These commitments are intended not only to improve the US trade balance, but also to reduce European dependence on third countries. Steel, aluminium and copper are exempt from the 15 per cent cap – here, surcharges of 50 per cent remain in place, which will hit traditional EU export industries particularly hard.The legal framework for implementation is a presidential order signed on 31 July, which comes into force seven days later and adjusts the US Harmonised Tariff Schedule accordingly. Washington is selling the result as a ‘historic recalibration’ of trade relations; Brussels emphasises that it has averted an escalation of the announced 30% punitive tariffs and gained planning security.But criticism in Europe is loud: German Chancellor Friedrich Merz warns of ‘considerable damage’ to competitiveness, while French Prime Minister François Bayrou speaks of a ‘dark day’ for industry. Economists expect many EU companies to have to choose between sacrificing margins and adjusting prices in the US – with potential inflationary and demand effects on both sides of the Atlantic.In the medium term, the agreement is likely to cause massive shifts in supply chains: the US energy and defence sectors will benefit immediately, while European car and machine manufacturers will increasingly build up production capacities in North America – a trend that is already evident in current investment plans and reveals the complete incompetence of European politicians! However, before the package becomes legally binding, the 27 EU member states and the European Parliament must ‘still’ give their approval; several MEPs have announced a detailed review of the ‘asymmetrical agreement’.Whether the agreement represents a stable new trade order or merely a respite depends on whether Brussels forces renegotiations – and whether Washington honours its commitments on market opening, investment and tariff reductions in the long term.

Seven-Day Sanctions Showdown

With just one week remaining before a new U.S. sanctions package enters into force, the Kremlin is facing its most perilous economic moment since the start of the full-scale invasion of Ukraine. President Donald Trump has set an 8 August deadline for Moscow to agree to a cease-fire or confront measures designed to choke off the few remaining arteries that still feed the Russian economy.With its criminal actions, the terrorist state of Russia is approaching the unjustified, murderous and completely unjustifiable war (murder of the Ukrainian civilian population, rape and terror by Russian soldiers against civilians in Ukraine) against its peaceful neighbour, Ukraine, and is now heading for economic ruin – and that is a good thing for any objective observer!The forthcoming order widens the financial dragnet beyond Russian entities themselves. Foreign banks clearing energy payments will be subject to “full-blocking” penalties, while buyers of Russian crude and refined products risk losing access to U.S. markets and the dollar system altogether. U.S. officials say the rules mirror the toughest Iran sanctions—but scaled for a G-20 economy—and will apply to oil lifted after 7 August, when a parallel tariff hike on 68 countries also takes effect.Energy is the Kremlin’s fiscal backbone, accounting for roughly a quarter of federal revenue. Yet oil-and-gas takings already fell more than 30 % year-on-year in June, and analysts warn the new secondary sanctions could erase what is left of that stream, forcing deeper budget cuts or a rapid drawdown of reserves.President Vladimir Putin has shown no sign of yielding. Speaking alongside Belarusian leader Alexander Lukashenko on 1 August, he insisted battlefield momentum favors Russia and repeated calls for “quiet, private” negotiations—language Washington interprets as stalling. The Kremlin claims to be stockpiling yuan and expanding barter channels, but traders report a renewed slide in the ruble and growing demand for dollars on the Moscow Exchange.Global markets are already on edge. Brent crude rose nearly three percent after Trump shortened his timeline, while Indian refiners paused new purchases of Russian Urals pending clarity on penalties. Beijing, facing its own trade disputes with Washington, has remained publicly non-committal but is discreetly canvassing Gulf suppliers about replacement volumes.European partners have welcomed the pressure. The EU’s 18th sanctions package, adopted on 18 July, tightens its own embargo on Russian energy technology and expands a ban on access to EU financial messaging services—moves designed to dovetail with the U.S. assault on dollar clearing. Unless Moscow capitulates or Washington relents, the world will know in seven days whether Russia’s war economy can survive a concerted strike against its last hard-currency lifeline. For businesses still exposed to Russian trade, the calendar—and the compliance clock—has never ticked louder.

Zelenskyy anti-graft gamble

President Volodymyr Zelenskyy entered office as the public face of a reformist wave, yet today he stands accused of dismantling the very anti-corruption architecture that underpinned his legitimacy. On 22 July Ukraine’s parliament fast-tracked amendments that place the National Anti-Corruption Bureau (NABU) and the Special Anti-Corruption Prosecutor’s Office (SAPO) under the effective control of the prosecutor general, a political appointee answerable to the presidency.The new law empowers the prosecutor general to reassign high-profile graft cases “when circumstances make NABU’s work impossible,” a clause critics describe as a licence for political interference. Within hours Zelenskyy signalled support, calling the changes a wartime necessity—only to trigger the largest street protests in Kyiv since the first months of the invasion. Demonstrators draped parliament with banners warning of a return to pre-revolution impunity and chanting “EU or bust,” a reference to Brussels’ demand that Kyiv maintain independent watchdogs as a core accession pre-condition.Financial stakes rose immediately. The European Commission privately told Kyiv that up to €18 billion in macro-financial aid could be frozen unless the rollback is reversed, while several donor governments paused disbursement of recovery funds earmarked for 2025-26. Foreign investors, already wary of doing business in a war zone, saw bond yields spike to a three-month high as rating agencies flagged “governance slippage”.Domestically, the chill reached law-enforcement corridors. NABU agents reported surprise searches of their offices by state-security operatives, officially justified as a hunt for “foreign infiltration.” Anti-graft officials countered that the raids aimed to seize case files implicating influential wartime contractors.Under pressure, Zelenskyy invited agency heads and civic groups to negotiate a face-saving compromise. Yet even a cosmetic fix may not repair the reputational damage: polls released this week show confidence in the president’s anti-corruption agenda falling below 40 percent for the first time since 2022. Meanwhile, NABU’s most sensitive investigations—ranging from drone-procurement fraud to embezzlement in frontline logistics—remain in limbo, jeopardising both battlefield efficiency and public morale.Analysts warn that weakening the investigative firewall could hard-wire patronage into Ukraine’s post-war reconstruction boom. Billions in future EU and World Bank contracts risk flowing through a system perceived to be politically captured, raising the prospect of donor fatigue at a moment when Kyiv’s fiscal gap already exceeds 20 percent of GDP. What began as a procedural tweak is thus morphing into a strategic gamble: Zelenskyy can retreat and reassure partners—or press ahead and test whether Ukraine’s allies will prioritise unity against Moscow over governance standards at home. Either path will define his presidency long after the guns fall silent.

Why China props up Putin

Beijing’s refusal to condemn Moscow’s full-scale assault on Ukraine has hardened into active, if carefully calibrated, material support. Customs and corporate-registration data show Chinese firms now dominate the flow of critical metals, micro-electronics and dual-use components that keep Russia’s defence industry alive, even as Western sanctions tighten.Recent investigative dossiers detail how small export-intermediaries in coastal provinces label drone engines as “industrial refrigeration units,” allowing them to cross Eurasia by rail and re-appear inside Shahed-style loitering munitions launched against Odesa and Kyiv.The trade underpinning this pipeline is immense. Despite a 9 % year-on-year dip, bilateral turnover still exceeded $106 billion in the first half of 2025, with Chinese car parts, machine tools and consumer electronics filling gaps left by departing Western brands. Energy sits at the core of the partnership. Xi Jinping and Vladimir Putin agreed in May to fast-track the 50 bcm-per-year “Power of Siberia 2” gas link, which would lock in discounted Siberian gas for decades and give Moscow a lifeline as European demand evaporates.Financial ties deepen in parallel. By late 2024 more than a third of Russia’s trade was settled in yuan, helping the Kremlin skirt dollar clearing and accelerating Beijing’s long-term bid to internationalise its currency. Yet 98 % of Chinese banks now refuse direct rouble deals, a sign of how carefully Beijing manages sanctions exposure. Strategically, Chinese planners see virtue in a protracted conflict that drains U.S. and European arsenals, diverts NATO bandwidth, and tests Western sanctions architecture—all while avoiding outright Russian collapse that could leave a NATO-leaning vacuum on China’s northern frontier.Washington and Brussels are responding. The EU is preparing its first penalties on Chinese banks accused of laundering Russian transactions, while Kyiv has black-listed several mainland suppliers implicated in drone production.Still, Beijing judges the benefits—energy security, discounted commodities, a pliant strategic partner, and valuable combat data for its own doctrine—outweigh the risks. The partnership remains officially “no-limits,” but in practice it is bounded by one overriding calculation: help Moscow enough to bleed Ukraine and frustrate the West, yet not so openly that secondary sanctions threaten China’s wider economic ambitions.

Alert in Trump’s America

In recent weeks, JPMorgan Chase CEO Jamie Dimon has issued a series of sobering warnings about the fragile state of the U.S. economy—warnings that ring particularly alarmingly in light of the aggressive economic policies advanced under Donald Trump. Dimon cautioned that the nation's bond market is on the brink of a serious "crack," fueled by ballooning budget deficits and deepening investor skepticism. With the national debt already exceeding $36 trillion and credit ratings under pressure, he warned that without decisive reforms, a reckoning is all but inevitable.Dimon’s concerns extend beyond bonds. In his quarterly report, he described the U.S. stock market as "kind of inflated," noting that asset valuations currently rank among the top 10–15 percent of historical levels. He attributed this overheating to sustained deficit spending, inflationary pressures, and geopolitical tensions. Trade measures, particularly tariffs adopted by the Trump administration, have further intensified those pressures—raising the risk of slower growth, inflation, and market instability.Emerging trends indicate volatility in Treasury yields, a jittery bond market, and mounting fears that markets may be underpricing systemic risks. Dimon voiced alarm that such mispriced optimism could lead to sudden market shocks, even as he sought to reassure stakeholders that the financial system remains fundamentally sound.Taken together, these warnings paint a picture of a U.S. economy that appears robust on the surface—buoyed by high valuations and bullish sentiment—but is in fact navigating mounting macroeconomic vulnerabilities. Under the Trump-era policies of elevated deficits, protectionism and regulatory uncertainty, Dimon is urging policymakers to act swiftly: not to stoke the bubble, but to defuse it before it bursts.

China’s profitless push

Can we keep up? Chinese companies are sacrificing margins—sometimes incurring outright losses—to win global market share in strategic industries from electric vehicles and batteries to solar and consumer tech. The tactic is turbocharging exports, pressuring Western competitors and forcing policymakers in Europe and the United States to erect new defenses while they scramble to lower costs at home.Electric vehicles: a race to the bottom on price. In late spring 2025, China’s largest carmakers unleashed another round of steep price cuts, with entry-level models reduced to mass-market price points. Regulators in Beijing have since urged manufacturers to rein in the bruising price war, citing risks to industry health and employment. Yet the incentives keep coming as dozens of brands fight for share in the world’s most competitive EV market. The financial fallout is visible: leading pure-play EV makers continue to post substantial quarterly losses, while ambitious new entrants have acknowledged that their car divisions remain in the red even as sales surge.Green tech: overcapacity meets collapsing margins. China’s build-out in solar has morphed from a growth engine into a profitability trap. Module and polysilicon prices have fallen so far that key manufacturers forecast sizeable half-year losses, and producers are now discussing a coordinated effort to shutter older capacity. Industry reports describe spot prices for feedstocks dipping below production costs, a hallmark of cut-throat competition that spills over into export markets and undercuts rivals globally.Trade blowback intensifies. The U.S. has moved to quadruple tariffs on Chinese-made EVs and lift duties on batteries, chips and solar cells. The European Union has imposed definitive countervailing duties on Chinese battery-electric cars and opened additional probes across green-tech supply chains. Brussels and Beijing have even explored minimum export prices to reduce undercutting—an extraordinary step that underscores how acute the pricing pressure has become.Deflation at the factory gate. China’s factory-gate prices remain in negative territory year on year, reflecting slack domestic demand and excess capacity. That weakness transmits abroad via cheaper exports, squeezing margins for manufacturers elsewhere and complicating central banks’ inflation-fighting calculus. Beijing has rolled out an “anti-involution” campaign to curb ruinous discounting and steer investment toward “high-quality growth,” but implementation is uneven and local governments still depend on industrial output to stabilize employment.Scale, speed—and logistics. Chinese champions are not only cutting prices; they are redesigning logistics to keep them low. One leading EV maker has built its own fleet of car carriers and is localizing production via overseas factories to sidestep tariffs and port bottlenecks. Such vertical integration magnifies the advantage from sprawling domestic supply chains in batteries, motors and power electronics.What this means for Western competitors. The immediate effect is a margin squeeze across autos, solar and adjacent sectors. The strategic response taking shape in Europe and the U.S. is three-pronged: (1) trade defense to buy time; (2) industrial policy to catalyze domestic gigafactories and clean-tech manufacturing; and (3) consolidation to rebuild pricing power. Companies that cannot match China’s cost curve will need to differentiate—through software, design, brand and service—or partner to gain scale. Even in China, the current “profitless prosperity” looks unsustainable: consolidation is inevitable, and state guidance now favors capacity rationalization over raw volume.The bottom line. China’s price-first strategy is remaking global competition. Whether others can keep up will hinge on how quickly they can de-risk supply chains, compress costs and innovate without hollowing out profitability. For now, the contest is being fought as much on balance sheets as it is on assembly lines.

Embraer’s 950% surge

Embraer has rewritten the aerospace playbook. From a once-overlooked regional specialist, the Brazilian manufacturer has emerged as the industry’s quiet juggernaut—outpacing its far larger rivals in shareholder returns and converting a focused product strategy into record commercial momentum. Since the pandemic trough, Embraer’s New York–listed shares have risen by well over ninefold, vaulting from single digits to new highs and putting a spotlight on how a disciplined “middle-of-the-market” bet can beat scale.At the heart of the surge is a portfolio calibrated for today’s constraints. Where Boeing fights through quality and compliance crises and Airbus wrestles with capacity limits and engine supply headaches, Embraer has leaned into the 70–150 seat segment with its second-generation E-Jets, expanded a resilient business-jet franchise, and steadily racked up wins for its C-390 Millennium airlifter. The result: an all-time-high firm order backlog nearing $30 billion this summer, alongside quarter-record revenues and deliveries. In a supply-choked world, dependable execution is a strategy—and it shows.Commercial aviation is the spear tip. Flagship orders in 2025—from Japan’s ANA for E190-E2s to a landmark SAS deal for up to 55 E195-E2s—signaled that network planners across developed markets want lower trip costs without sacrificing comfort or range. E2 economics have given carriers a credible alternative to deploying larger narrowbodies on thin or regional routes, and Embraer’s cabin design (no middle seat, fast turns) aligns neatly with post-pandemic route rebuilding. New-market beachheads in Mexico and continued growth with operators in Europe and the Americas are translating into delivery growth that’s outpacing last year.Defense has become the dark horse. The C-390 Millennium, once a niche challenger, has turned into Europe’s go-to Hercules alternative, notching selections and orders across NATO and beyond. Beyond mission flexibility and speed, Embraer’s willingness to localize industrial footprints in Europe has strengthened its political and logistical case. As defense budgets rose, that combination—performance plus partnership—pulled the program into the mainstream and diversified group earnings just as commercial demand returned.Then there is executive aviation, an underestimated earnings engine. Phenom and Praetor jets continue to compound on the back of strong utilization, fleet replacements, and aftermarket growth. Together with services and support, these businesses have added ballast to Embraer’s cash generation and helped smooth cyclicality—another reason the equity rerated higher rather than snapping back to pre-crisis multiples.The competitive contrast is stark. Airbus remains the global delivery leader with a gargantuan backlog—but constrained slots mean years-long waits, particularly in single-aisles. Boeing, meanwhile, is still working through a prolonged manufacturing and oversight reset that has capped output and sapped buyer confidence. Embraer isn’t “bigger” than either; it’s simply been better positioned to deliver reliable capacity now, in exactly the seat ranges airlines can actually crew, fuel, and fill profitably. In public markets, timing and credibility compound.None of this is risk-free. The E2 family’s reliance on geared-turbofan technology ties Embraer to an engine ecosystem still normalizing after widespread inspection programs. Trade policy is a new wild card, with tariff chatter periodically jolting shares. And the urban-air-mobility bet via Eve remains a long-dated option, not a 2025 cash cow. But the core machine—commercial E-Jets, executive jets, C-390, and services—is running at record velocity with improving mix and scale.“Destroyed” may be the language of headlines; what’s indisputable is the scoreboard: since its pandemic low, Embraer has delivered a stock performance that has eclipsed both transatlantic giants, while building a backlog and delivery cadence that validate its strategic lane. In today’s aerospace cycle, the middle seat wins.

Bolivia at breaking point

In recent months, Bolivia has lurched from crisis to crisis. Long queues at gas stations, sporadic road blockades, and clashes between rival political camps have fed fears of a broader internal conflict. A year after a failed military putsch shook La Paz, the country now faces a decisive political transition against the backdrop of a rapidly deteriorating economy. As of August 18, 2025, preliminary results point to an October 19 runoff that ends two decades of dominance by the ruling movement—an inflection point that could steer the country toward stabilization or push it closer to a dangerous spiral. A political rupture with violent undertonesBolivia’s governing bloc fractured into warring factions after the split between President Luis Arce and his onetime mentor, former president Evo Morales. That rift spilled into the streets this year: blockades, counter-mobilizations, and deadly confrontations were recorded in mining towns and highland corridors, with church leaders warning of a “spiral of violence.” Those tensions sit atop the still-raw memory of June 26, 2024, when armored vehicles briefly surrounded the presidential palace before the putsch collapsed and commanders were arrested.The economic picture is grim. In January, a major rating agency cut Bolivia to CCC-, citing vanishing foreign-exchange buffers and looming external payments; by its estimate, the country faced around $110 million in Eurobond coupons this year with only about $47 million in liquid reserves at one point. Fuel imports—long subsidized—have repeatedly faltered, triggering national transport strikes, border disruptions, and days-long lines for gasoline and diesel. Inflation, once among South America’s lowest, surged to multi-decade highs through mid-2025. A chronic dollar shortage has fractured the currency regime: while the official rate stayed near 6.96 bolivianos per dollar, a thriving parallel market developed. By late July the street rate hovered around 14 BOB per USD—stronger than its worst levels earlier in the year, but still far from the peg—underscoring lost confidence. As households and small firms struggled to access currency, some turned to crypto and informal finance as workarounds. Gold and gas: lifelines with limitsTo scrape together hard currency, authorities leaned on the country’s booming (and often opaque) gold trade, monetizing bullion to raise billions in fresh dollars—an emergency bridge, not a structural fix. Meanwhile, the gas engine that powered Bolivia for two decades has sputtered. Exports to Argentina ended in 2024 as output slumped, and in a symbolic reversal this year, Argentina began shipping Vaca Muerta gas through Bolivia toward Brazil using Bolivian pipelines—signaling how far the regional energy balance has shifted. Why fears of wider conflict are not far-fetchedNo single spark guarantees a slide into civil war, but several risk factors now overlap: factionalized parties with loyal street bases, pockets of armed actors and hardliners, a legitimacy fight around barred candidacies and court rulings, and an economy that can no longer cushion shocks with cheap fuel or a steady dollar supply. Independent monitors have recorded lethal violence tied to the intra-left feud, while civic leaders in blockaded towns report confrontations between residents, protesters, and security forces. Each new blockade erodes livelihoods, deepens scarcity, and shortens tempers—a classic recipe for escalation. The runway to October—and what comes afterThe first-round result has upended Bolivia’s political map: two opposition figures advanced and the ruling movement’s candidate finished far behind, all amid the worst macro stress in a generation. Whoever wins in October will inherit unpopular choices: rationalizing fuel subsidies, rebuilding reserves, restoring a functional FX market, and reviving the gas sector while speeding up transparent lithium and gold governance. Failure risks further shortages, more street battles over scarcity, and a dangerous normalization of political violence. Success demands a credible stabilization plan, broad buy-in from unions and regional elites, and early signals—like targeted cash transfers and a clear, time-bound subsidy path—to keep social peace while reforms bite.

Adobe down 40%: Kodak moment?

Adobe’s stock has spent the summer trading roughly 40% below its 52-week high, a striking reversal for a company long treated as a bellwether of the creative economy. The sell-off reflects a convergence of pressures: intensifying AI-driven competition, regulatory scrutiny of subscriptions, controversial pricing changes, and a shifting center of gravity from applications to underlying AI infrastructure. The question hanging over the market is whether Adobe faces a Kodak-style disruption—or is merely navigating a bruising but temporary reset.The slide behind the headlineAs of mid-August, shares remain about 40% beneath last year’s 52-week high, underscoring how swiftly sentiment has flipped from euphoria around generative AI to worries about commoditization. The drop has also been amplified by analyst downgrades that argue value may be migrating from application-layer software to AI infrastructure and platforms.Competitive shock: AI eats software (and design)The rise of text-to-image and text-to-video tools has lowered creative barriers for individuals and enterprises alike. Web-first design platforms and AI-native video apps are courting Adobe’s core audience with lower prices, simpler workflows, and collaborative features that feel “good enough” for many use cases. Adobe’s aborted attempt to buy a fast-growing design rival left that competitor independent—and emboldened. Meanwhile, a separate deal created a powerful alternative bundle for creative pros by combining a mass-market design platform with a full professional suite.Pricing, packaging and customer trustAdobe is hiking and repackaging parts of Creative Cloud, rebranding “All Apps” to “Creative Cloud Pro” with expanded generative features. For some customers, the shift promises more AI value; for others, it reinforces “subscription fatigue” and raises the risk of churn to cheaper alternatives. Compounding the perception problem, U.S. regulators have sued Adobe over alleged “dark patterns” in subscription cancellations—claims the company denies. Regardless of the legal outcome, the episode has kept pricing and trust squarely in the headlines.Product reality check: far from standing stillIt would be a mistake to equate a falling share price with a failing product engine. Adobe continues to ship at pace: newer Firefly models add higher-fidelity image generation and expanding video features; core apps like Photoshop, Illustrator and Lightroom keep absorbing AI-assisted tooling; and the company is pushing “content credentials” and indemnities aimed at enterprises wary of copyright risk. Under the hood, the financial machine still hums: record quarterly revenue, double-digit growth in its Digital Media segment, and a large recurring-revenue base suggest substantial resilience.Buybacks vs. disruptionManagement has been retiring shares under a multi-year, $25 billion repurchase authorization—classic playbook for signaling confidence and supporting EPS. But buybacks don’t answer the existential question: if AI ultimately turns many creative tasks into commodity services, can Adobe preserve pricing power and premium margins at application level?Is this really a “Kodak moment”?Kodak’s mistake wasn’t missing a feature—it was clinging to a cash-cow business model while the medium itself changed. Adobe’s risk rhymes, but is not identical:-  The bear case: If AI creation and editing consolidate into low-cost, browser-based suites and assistants embedded by cloud and OS giants, Adobe’s subscription pricing could face sustained pressure. Regulatory and reputation hits around subscriptions or data use could accelerate defections at the margin.-  The bull case: Creative workflows remain multi-step, brand-sensitive, and quality-obsessed. Enterprises still prize compliance, provenance, and integration across design, marketing, and document ecosystems—areas where Adobe is deeply entrenched. If Firefly and Acrobat AI become indispensable “copilots,” Adobe can monetize AI inside a platform customers already trust.-  Most likely near-term: A grind. Revenue and ARR continue to grow at a healthy clip, but multiples reflect uncertainty about long-run AI economics. Execution on pricing, retention, and enterprise AI value will decide whether this reset becomes a rerating upward—or a slow leak. Enterprise AI adoption of Firefly and Acrobat AI (features used at scale, not just trials). Regulatory outcomes in the U.S. subscription case and any spillover into practices globally.Partner ecosystem—how deeply Adobe’s AI models integrate with (or get displaced by) hyperscaler stacks. Adobe’s 40% drawdown signals a market repricing of app-layer software in the AI era—not proof of a Kodak-style collapse. The company still has brand, distribution, and cash flow on its side. Whether that’s enough will depend less on dazzling demos and more on something prosaic: making AI raise productivity, reduce friction, and earn its keep for paying customers.

Adobe down 40% and now?

Adobe’s stock has spent the summer trading roughly 40% below its 52-week high, a striking reversal for a company long treated as a bellwether of the creative economy. The sell-off reflects a convergence of pressures: intensifying AI-driven competition, regulatory scrutiny of subscriptions, controversial pricing changes, and a shifting center of gravity from applications to underlying AI infrastructure. The question hanging over the market is whether Adobe faces a Kodak-style disruption—or is merely navigating a bruising but temporary reset.The slide behind the headlineAs of mid-August, shares remain about 40% beneath last year’s 52-week high, underscoring how swiftly sentiment has flipped from euphoria around generative AI to worries about commoditization. The drop has also been amplified by analyst downgrades that argue value may be migrating from application-layer software to AI infrastructure and platforms.Competitive shock: AI eats software (and design)The rise of text-to-image and text-to-video tools has lowered creative barriers for individuals and enterprises alike. Web-first design platforms and AI-native video apps are courting Adobe’s core audience with lower prices, simpler workflows, and collaborative features that feel “good enough” for many use cases. Adobe’s aborted attempt to buy a fast-growing design rival left that competitor independent—and emboldened. Meanwhile, a separate deal created a powerful alternative bundle for creative pros by combining a mass-market design platform with a full professional suite.Pricing, packaging and customer trustAdobe is hiking and repackaging parts of Creative Cloud, rebranding “All Apps” to “Creative Cloud Pro” with expanded generative features. For some customers, the shift promises more AI value; for others, it reinforces “subscription fatigue” and raises the risk of churn to cheaper alternatives. Compounding the perception problem, U.S. regulators have sued Adobe over alleged “dark patterns” in subscription cancellations—claims the company denies. Regardless of the legal outcome, the episode has kept pricing and trust squarely in the headlines.Product reality check: far from standing stillIt would be a mistake to equate a falling share price with a failing product engine. Adobe continues to ship at pace: newer Firefly models add higher-fidelity image generation and expanding video features; core apps like Photoshop, Illustrator and Lightroom keep absorbing AI-assisted tooling; and the company is pushing “content credentials” and indemnities aimed at enterprises wary of copyright risk. Under the hood, the financial machine still hums: record quarterly revenue, double-digit growth in its Digital Media segment, and a large recurring-revenue base suggest substantial resilience.Buybacks vs. disruptionManagement has been retiring shares under a multi-year, $25 billion repurchase authorization—classic playbook for signaling confidence and supporting EPS. But buybacks don’t answer the existential question: if AI ultimately turns many creative tasks into commodity services, can Adobe preserve pricing power and premium margins at application level?Is this really a “Kodak moment”?Kodak’s mistake wasn’t missing a feature—it was clinging to a cash-cow business model while the medium itself changed. Adobe’s risk rhymes, but is not identical:-  The bear case: If AI creation and editing consolidate into low-cost, browser-based suites and assistants embedded by cloud and OS giants, Adobe’s subscription pricing could face sustained pressure. Regulatory and reputation hits around subscriptions or data use could accelerate defections at the margin.-  The bull case: Creative workflows remain multi-step, brand-sensitive, and quality-obsessed. Enterprises still prize compliance, provenance, and integration across design, marketing, and document ecosystems—areas where Adobe is deeply entrenched. If Firefly and Acrobat AI become indispensable “copilots,” Adobe can monetize AI inside a platform customers already trust.-  Most likely near-term: A grind. Revenue and ARR continue to grow at a healthy clip, but multiples reflect uncertainty about long-run AI economics. Execution on pricing, retention, and enterprise AI value will decide whether this reset becomes a rerating upward—or a slow leak. Enterprise AI adoption of Firefly and Acrobat AI (features used at scale, not just trials). Regulatory outcomes in the U.S. subscription case and any spillover into practices globally.Partner ecosystem—how deeply Adobe’s AI models integrate with (or get displaced by) hyperscaler stacks. Adobe’s 40% drawdown signals a market repricing of app-layer software in the AI era—not proof of a Kodak-style collapse. The company still has brand, distribution, and cash flow on its side. Whether that’s enough will depend less on dazzling demos and more on something prosaic: making AI raise productivity, reduce friction, and earn its keep for paying customers.

Al-Qaida’s growing ambitions

In recent years, Al‑Qaida has quietly restructured and expanded key elements of its network — from training camps and regional affiliates in Afghanistan and beyond, to renewed focus on propaganda and recruitment through modern communications. This resurgence, though still fragmented, increasingly suggests that Al-Qaida is laying groundwork not only for sporadic terror attacks, but for establishing durable footholds which could evolve into de facto zones of control — a development that should alarm European security institutions.Once seen as largely diminished with the removal of high-profile leadership, Al-Qaida has demonstrated remarkable resilience. Its decentralized “network of networks” model enables local affiliates and loosely connected cells to operate with considerable autonomy, while still drawing ideological coherence and logistical support from the core. This model lowers entry barriers for local militant groups inspired by its ideology — a subtle but potent evolution from the classic “top-down” terror organization.Moreover, Al-Qaida’s adoption of new technologies complicates detection. Terrorist actors increasingly rely on encrypted platforms, the dark web, and even generative-AI tools to recruit, radicalize and coordinate operations. This digital shift enables remote radicalization and planning, reducing the need for physical sanctuaries — but also masking activities from traditional intelligence and law-enforcement scrutiny.Regions of instability — such as parts of the Middle East, North Africa, and the Sahel — have become fertile ground for Al-Qaida’s expansion. These zones, often neglected in public discourse, now serve as incubators for networks that may aim to export influence, operatives, or refugees toward Europe. Historical experience shows that even small cells — when radicalized, organized, and motivated — can inflict damage beyond their geographical origins.For Europe, the threat lies not only in headline-grabbing terror attacks, but in the gradual erosion of security through infiltration, radicalization, sleeper-cells, and covert networks. Should Al-Qaida succeed in consolidating territories or safe havens, the challenge would shift from reactive counterterrorism to a strategic struggle over long-term stability.Now more than ever, European governments and institutions must treat Al-Qaida as a dynamic, evolving network — not a relic of the past. Proactive, coordinated efforts in intelligence-sharing, deradicalization, monitoring of migration flows, and disruption of online propaganda are crucial. Ignoring the signs of Al-Qaida’s silent reorganization would be a dangerous gamble: the consequences could redefine Europe’s security landscape for decades.

Argentina's radical Shift

Argentina is in the middle of a historic experiment. When libertarian economist Javier Milei took office on 10 December 2023, he inherited an economy gripped by triple‑digit inflation, a fiscal deficit equal to around 15 % of GDP, negative foreign‑exchange reserves and a country risk premium that made external financing almost impossible. Weekly price jumps were eroding purchasing power and nearly half of Argentines lived in poverty. In the 1990s a reform wave under President Carlos Menem introduced a currency board, privatized state companies and liberalised trade; those changes briefly stabilised prices but unravelled after persistent fiscal deficits led to a sovereign default in 2001. Milei argues that this earlier programme did not go far enough and has promised “the largest structural reform in Argentine history,” which he says is eight times larger than Menem’s and will transform the country into “the freest nation on the planet”.Shock Therapy and AusterityWithin days of taking office, Milei unleashed a package of policies that he called shock therapy. His finance minister devalued the peso by more than 50 %, set a crawling peg for the currency, halved the number of ministries and announced a fiscal adjustment of around 5 % of GDP. Government ministries were slashed from 18 to nine, thousands of public‑sector contracts were terminated and many public works projects were cancelled. A plan to shrink the state by roughly a third included closing state‑owned news agencies and eliminating subsidies for culture and the arts. Energy and transport subsidies — which had cost the treasury US$12 billion in 2022 — were cut sharply, while a tax amnesty was introduced to lure dollars stashed abroad back into the banking system. Import and export restrictions were lifted, price controls removed and the central bank stopped financing the treasury, ending a practice that economists blame for Argentina’s chronic inflation.The “chainsaw” approach shocked a society accustomed to state intervention. Public sector workers, construction employees and pensioners were hit hard. Tens of thousands lost their jobs or saw salaries and pensions lag behind prices. Construction activity collapsed after public works were frozen, costing an estimated 200,000 jobs, and austerity measures reduced funding for universities and hospitals. Unemployment and poverty surged in early 2024; some surveys reported poverty peaking at around 53 %. Milei acknowledged the pain but insisted that “there is no money” and that the alternative was hyperinflation.Early Results and Second‑Year ProgressThe shock therapy delivered results faster than many economists expected. After spiking briefly, monthly inflation plunged from roughly 25.5 % in December 2023 to 2.7 % by October 2024. Fiscal austerity and the elimination of money printing produced Argentina’s first budget surplus in more than a decade. By mid‑2024 the economy ran a trade surplus and improved its trade balance by more than US$18 billion, reflecting a decline in imports and an export boom driven by agricultural products and the Vaca Muerta shale field. Country‑risk indicators fell to their lowest levels in years, bonds rallied and the gap between official and parallel exchange rates narrowed sharply. A tax‑amnesty programme drew some US$19 billion back into the banking system, boosting reserves. Monthly inflation continued to fall into 2025, reaching around 2 %, a deceleration described by analysts as unprecedented.Second‑Year ProgressBy the middle of 2025 the government began to point to clear signs of economic turnaround. Output data show that GDP grew by 6.3 percent and investment by 32 percent year‑on‑year in the second quarter of 2025 after contracting early in Milei’s term. International institutions forecast overall growth of 4.7–5.5 percent for 2025. Annual inflation, which had reached 289 percent early in his administration, fell to 34 percent, equivalent to roughly 2 percent per month, and the poverty rate dropped from 53 percent to 32 percent, lifting more than 11 million people above the poverty line. Consumption and exports recovered, and employment started to grow.The administration attributes these gains to aggressive cuts and deregulation. It claims to have reduced the federal budget by 30 percent, balancing it by Milei’s second month in office. Public debt fell by about 12 percent, and the president vowed never again to run a deficit. A new ministry dedicated to deregulation abolished ten ministries, merged agencies and fired over 53,000 public employees. As of August 2025, the government had enacted 1,246 deregulations, roughly two per day, cutting red tape in energy, agriculture, real estate and health. The programme also repealed 22 taxes and reduced export duties, scrapped import licences and raised the limit on duty‑free purchases. These measures lowered prices for many goods — for example, home appliances fell 35 percent after import licences were abolished — and allowed livestock producers to import vaccines at a third of the previous cost. Rental deregulation tripled housing supply and cut real rents by around 30 percent, and mortgage lending has surged from a handful of loans in 2023 to a tripling of new mortgages in 2024. Together these changes are intended to create the freest economy in Argentina’s history.Milei used this momentum to claim that his government was “the best in history” and that his fiscal adjustment was the largest ever attempted. In an interview he declared that his administration had already executed a structural reform eight times larger than Menem’s and that his deregulation ministry was scrapping “between one and five regulations every day,” with more than 3,200 reforms still pending. The reforms have propelled Argentina up 90 places in an international economic‑freedom index, the president bragged, and he vowed to keep pushing until the country surpasses Ireland, Switzerland and New Zealand.Social Costs and Rising DissentDespite the improvement in macro indicators, the social consequences of Milei’s programme are severe. Real wages have fallen, and poverty, though down from its peak, still affects almost half of the population. Retirees have seen the real value of pensions eroded, with the average minimum pension hovering around US$300. Cuts to university budgets have left some campuses struggling to pay electricity bills. High interest rates — imposed to defend the peso — have frozen bank lending and provoked a steep drop in economic activity, especially in construction and manufacturing. Critics argue that opening the economy too quickly exposes local industries to cheap imports and risks deindustrialisation. Protests by pensioners, students and public‑sector unions have become more frequent, and opposition politicians warn that the recession will deepen if austerity continues unabated.Milei dismisses such criticisms as coming from the “political caste” he has vowed to defeat. He believes the temporary pain is a necessary price for eliminating structural distortions. To mitigate hardship, the government doubled the universal child allowance and increased food assistance, but for many households the support has not offset the effects of subsidy cuts and high inflation.Midterm Mandate and Reform BlitzArgentina’s October 2025 midterm elections turned into a referendum on Milei’s policies. The libertarian alliance La Libertad Avanza (LLA) captured more than 40 percent of the vote and more than doubled its share of seats in Congress. Preliminary results show the party winning 13 of the 24 Senate seats up for election and 64 of the 127 seats contested in the lower house, while the main Peronist coalition fell to second place. This landslide, combined with a turnout of 67.9 percent — the lowest since Argentina’s return to democracy — handed Milei the political capital he needs to advance reforms. Analysts say the midterm win “raised the prospect of structural change on a scale Argentina has not seen in decades”, and investors see it as a positive sign that a more market‑friendly Congress will back his agenda.U.S. support played an important role. In the weeks before the vote Washington offered a twenty‑billion‑dollar currency swap line and another twenty‑billion‑dollar loan facility to shore up Argentina’s reserves. After the election, analysts noted that U.S. backing of up to US$40 billion would encourage longer‑term investment in Argentine assets. Investors anticipate that Milei will now pursue sweeping labour and tax reforms that could unlock billions of dollars in foreign investment. Plans under discussion include simplifying the tax system, making labour contracts more flexible and reducing pension costs. A simplified tax regime, flexible labour laws and lower pension obligations are seen as prerequisites for Argentina’s competitiveness and will be key components of Milei’s “Pacto de Mayo” programme.The election also cemented investor confidence in the government’s Régimen de Incentivos para Grandes Inversiones (RIGI). Under this scheme, companies investing more than US$200 million receive 30‑year guarantees of legal and tax stability and a reduced corporate income tax of 25 percent, down from the standard 35 percent. Observers say the combination of a strengthened Congress and the RIGI regime will attract more foreign capital to mining, energy and infrastructure projects.International investors have taken note. Improved fiscal accounts and the promise of structural reform have attracted pledges of major investments. Energy companies have committed US$25–30 billion to build a liquefied natural gas terminal at Vaca Muerta, a project expected to create 50,000 jobs and generate US$300 billion in exports over two decades. Mining firms plan a US$15–17 billion copper and gold project in San Juan, described as the largest private investment in Argentine history. A technology consortium led by a U.S. artificial‑intelligence company has announced a US$25 billion data‑centre project in Patagonia. The United States has signalled support with a US$20 billion swap line and potential additional financing. Analysts believe that a simpler tax regime, flexible labour laws and lower pension costs could unlock billions in mining, energy and infrastructure investment.Yet Milei must still build alliances to turn proposals into law. Even after the midterms his party lacks a majority in both houses, and he needs support from centrist and provincial parties to enact reforms. Some lawmakers remain cautious; one Peronist congressman suggested the government must seek consensus rather than impose a programme unilaterally. Allies warn that fiscal discipline is non‑negotiable, but labour reforms could face resistance from unions and courts. Failure to build durable coalitions could stall the reform blitz and undermine investor confidence.Comparing with the 1990sThe last time Argentina attempted such sweeping changes was during the early 1990s. Hyperinflation in 1989–90 forced a political consensus for reform, and the government introduced a Convertibility Plan in 1991 that fixed the peso at par with the U.S. dollar and privatised most state enterprises. The package included trade liberalisation, tax reforms, and the replacement of the pay‑as‑you‑go pension system with private capitalisation. For a time the economy boomed and inflation collapsed, but the plan’s rigid exchange‑rate peg and lack of fiscal discipline eventually contributed to the devastating 2001 crisis. Milei argues that those reforms were incomplete and financed with debt. His programme goes further by eliminating monetary financing, balancing the budget, liberalising currency controls and aggressively deregulating markets. By claiming that his reforms are eight times more extensive than Menem’s, he positions his agenda as the largest structural change since the 1990s.Outlook: Promise and PerilMilei’s experiment has altered Argentina’s economic narrative. A year of aggressive austerity has stabilised inflation and restored fiscal discipline, leading to cautious optimism among investors. Massive energy, mining and technology projects could transform the export mix and relieve Argentina’s perennial foreign‑exchange constraint. Support from the United States and multilateral lenders provides a financial cushion while reforms take root. If labour, tax and pension bills pass, Argentina could enjoy a more competitive tax code, flexible labour market and sustainable social‑security system, changes that companies say are necessary for long‑term investment.But risks are substantial. Despite the fiscal surplus and lower inflation, Argentina remains in a deep recession; output fell 3.4 percent in the first half of 2025 and is expected to decline almost 4 percent for the year. Consumer demand has collapsed and unemployment has risen to about 8 percent, while nearly half of workers lack formal contracts and social security. Tens of thousands of public‑sector jobs have been cut, and many households now rely on multiple jobs because wages lag behind inflation. The peso remains overvalued: after an initial devaluation, the government has maintained a 2 percent per month crawling peg, causing the gap between the official and unofficial exchange rates to widen again. Import taxes of 17.5 percent and licensing requirements make trade unpredictable, and the administration plans to reduce the levy to 7.5 percent only gradually. These barriers, together with currency controls that limit citizens to changing US$200 of currency per month, continue to discourage investment and could prolong the recession.High interest rates and a strong peso threaten to squeeze exporters, while rapid import liberalisation risks deindustrialisation. Poverty remains high and social unrest could erupt if growth fails to materialise or if reforms are seen as benefiting only elites. Analysts warn that the currency remains vulnerable; mismanagement could reignite inflation or force a disorderly devaluation. Politically, Milei must shift from a confrontational approach to consensus‑building. Although the midterm strengthened his hand, he still lacks an outright majority and needs to negotiate with provincial governors and centrist lawmakers to pass labour, tax and pension bills. His ability to convert ambitious reforms into enduring state policy will determine whether Argentina’s new era becomes a sustainable success or another aborted experiment.

Israel’s Haredi Challenge

The ultra‑Orthodox, or Haredi, community in Israel has become the focus of intense national debate. When the state was founded in 1948, a small number of exceptional Torah scholars were allowed to devote themselves to study instead of serving in the military. Nearly eight decades later, the people who follow this stringent interpretation of Judaism make up almost one in seven Israelis. Their numbers are growing rapidly, their political parties wield outsized influence in coalition politics, and their educational and economic choices increasingly shape the country’s future. As Israel grapples with war in Gaza, coalition infighting and a fragile economy, many secular and modern‑orthodox Israelis view the Haredi sector as the most formidable challenge to national cohesion and prosperity.A population boom and its consequencesDemography is the most visible driver of change. Haredi families typically marry young and have large households: fertility rates average more than six children per woman, compared with about three across Israeli society. As a result, the community’s population has doubled in just fifteen years and now exceeds 1.3 million people. Demographers project that, by the start of the next decade, they will make up around one sixth of Israel’s citizens, and that their share of the 25‑29 age cohort will rise from 13 per cent in 2025 to 28 per cent by 2060. Around sixty per cent of Haredim are under the age of twenty. This youthful, rapidly expanding population concentrates in high‑density neighbourhoods in Jerusalem and Bnei Brak, placing intense pressure on housing, schools and local services.Education and the labour marketMost ultra‑Orthodox boys’ schools devote the bulk of the day to religious studies and neglect secular subjects such as mathematics, English and science. The government provides funding to schools that pledge to teach a “core curriculum”, but enforcement is weak and many Haredi schools either ignore or water down these subjects. Policy analysts argue that this educational deficit locks many Haredi men out of higher education and skilled employment.In the labour market, a gender divide has emerged. Haredi women, who often shoulder the financial burden while their husbands study, have made significant strides; about four fifths participate in the workforce. In contrast, employment among ultra‑Orthodox men has stalled at just over half, compared with around 85 per cent among other Israeli men. Many rely on stipends for yeshiva students and generous child allowances, reinforcing the incentive to remain outside the labour force. An OECD survey issued in April 2025 notes that budgetary support for yeshivas was increased significantly in recent years, deepening men’s disincentives to seek work. The same report stresses that reallocating funding toward schools that teach the full curriculum and conditioning childcare support on both parents’ employment could help narrow labour‑market gaps.The result of low male employment is acute economic disparity. Ultra‑Orthodox households tend to earn roughly two thirds of the income of non‑Haredi households and depend more heavily on public benefits. With the community’s share of the population rising steadily, these gaps threaten to undermine Israel’s fiscal base and widen social divisions.The conscription crisisIsrael’s defence doctrine rests on the principle of universal national service. Yet tens of thousands of Haredi men receive de facto exemptions because they are enrolled in religious seminaries. In June 2024, the country’s Supreme Court declared that, in the absence of a specific law distinguishing yeshiva students from other citizens, the defence service statute applies to them like anyone else. The justices decried the previous system as selective enforcement and a violation of equality, especially during wartime.The ruling has proved difficult to implement. Despite an urgent demand for additional combat troops in 2025, only a tiny fraction of eligible ultra‑Orthodox men have presented themselves at induction centres. Estimates suggest that fewer than five per cent responded to call‑up notices and barely one per cent were actually inducted. Many secular and modern‑orthodox Israelis, who have spent long stints on the front lines since October 2023, are angered by what they see as an unfair distribution of sacrifice. Ultra‑Orthodox leaders argue that Torah study is a form of national service and insist that conscription would erode their religious way of life. They cite fears of exposure to secular influences, mixed‑gender environments and the weakening of rabbinic authority.Protests and political turmoilThe dispute over military service has triggered some of the largest demonstrations in Israeli history. On 30 October 2025, hundreds of thousands of Haredi men converged on Jerusalem in a “million‑man march” to demand that yeshiva students remain exempt. The protest shut down highways and public transport, drew thousands of police officers and resulted in the death of a teenager who fell from a building. Banners proclaimed, “The people are with the Torah,” and speakers accused the government of betraying Judaism. The rally followed arrests of students who ignored draft notices.These events have destabilised the governing coalition. Ultra‑Orthodox parties hold roughly 18 of the Knesset’s 120 seats, making them indispensable partners for Prime Minister Benjamin Netanyahu. In July 2025 the United Torah Judaism party walked out of the government over the failure to pass a draft‑exemption law, and the Shas party resigned from its cabinet posts while continuing to vote with the coalition. Both insisted that they would not return until the status of yeshiva students was secured.In early November 2025 Netanyahu sought to break the impasse by advancing a conscription bill drawn up by Knesset Foreign Affairs and Defence Committee chair Boaz Bismuth. The proposal aims to enlist fifty per cent of each annual ultra‑Orthodox draft cohort within five years. Critics, including opposition leader Yair Lapid, denounce it as a draft‑evasion bill riddled with loopholes. It lowers the threshold for yeshiva students to qualify for exemptions and softens penalties; draft evaders would be allowed to travel abroad after age 26, and licence suspensions would be scrapped. Supporters argue that codifying a realistic target will stabilise the coalition and bring ultra‑Orthodox parties back into government. As of mid‑November, the bill’s fate remains uncertain, and any perceived capitulation could provoke further protests or even bring down the government.Gender segregation and the public sphereBeyond conscription and economics, the ultra‑Orthodox exert growing influence on daily life. Although Israel’s Supreme Court outlawed gender‑segregated public buses in 2011, incidents persist. In 2023 a bus driver ordered teenage girls to cover their bodies and sit at the back, asserting that the route was a religious line; the case ended in a legal settlement in 2025. Advocacy groups recorded dozens of complaints of gender exclusion on public transport that year.At the legislative level, coalition lawmakers have promoted initiatives that critics say blur the separation between religion and state. In October 2025 ministers proposed a bill requiring every public institution to affix a mezuzah and granting broad protections for religious rituals. Under the measure, interfering with Orthodox practices would become a criminal offence, and gender‑segregated prayer could be permitted if it reflected the worshippers’ tradition. Supporters framed the bill as protecting Jewish heritage; opponents warned that it would turn public spaces into ultra‑Orthodox domains and infringe upon democratic norms. Although some of the most controversial provisions were later removed, the episode underscored fears among secular Israelis that their society is being remoulded according to Haredi standards.Change from withinThe Haredi world is not uniform, and signs of change are visible. A survey published in October 2025 by researchers from the Hebrew University found that while the community retains conservative values, economic necessity has driven increasing acceptance of employment and professional education, particularly for women. Respondents described a “bounded pragmatism”: they adapt behaviour without renouncing ideology. Core religious studies and male higher education remain sensitive boundaries, but many respondents expressed openness to new national Haredi political frameworks. Opposition to mandatory military service was widespread and couched in moral terms.Another social shift involves those leaving the ultra‑Orthodox fold. A study by the organisation Out for Change in 2025 found that growing numbers of former Haredim remain religiously observant in varying degrees and maintain ties to their families. Contrary to stereotypes, departure from the community does not always entail a complete break with faith; for many it is a move towards a hybrid identity that balances tradition and modernity.Paths to integrationAddressing the ultra‑Orthodox challenge requires a multi‑layered approach. First, education policy must ensure that schools receiving state funds teach the full core curriculum; enforcement of funding conditions should be robust. Universities and vocational colleges can develop programmes tailored to ultra‑Orthodox students, offering separate campuses or hours to accommodate cultural norms. Financial incentives, such as earned‑income tax credits, should encourage men to seek employment rather than rely on stipends.Second, conscription policy needs to balance equality with respect for religious sensibilities. Creative solutions could include expanded civil‑service tracks, specialised military units that protect religious observance, or alternative service in healthcare and education. The goal should be to share the defence burden more equitably while acknowledging the community’s fears.Third, coalition politics should not treat public funds as bargaining chips. Transparent budgets, clear criteria for subsidies and accountability for yeshivas would reassure taxpayers that funds are being used responsibly. Dialogue between government ministers, army officials and rabbinic leaders is essential to design policies that are both just and workable.Finally, a pluralistic public sphere must be safeguarded. Laws should protect freedom of religion without imposing religious norms on unwilling citizens. Resolving disputes over gender segregation, Sabbath observance and kosher certification will require compromise and a renewed commitment to democratic principles.ConclusionIsrael’s ultra‑Orthodox community poses a unique challenge because its demographic momentum intersects with issues of economy, defence, politics and culture. The community’s deep commitment to tradition, combined with its growing size and political leverage, tests the country’s ability to remain both Jewish and democratic. Navigating this challenge will demand a delicate balance of enforcement and accommodation: enforcing equal obligations and educational standards while accommodating religious identity and autonomy. If Israel can foster integration without coercion and encourage responsibility without alienation, the Haredi challenge could become an opportunity to strengthen social cohesion and economic vitality.

Pension crisis engulfs France

In autumn 2025 the long‑running battle over France’s retirement system morphed from a fiscal headache into an existential crisis. After years of protests and political upheavals, the government admitted that its flagship 2023 pension reform had failed to plug the funding gap. Public auditors warned that the country’s pay‑as‑you‑go scheme, financed almost entirely by payroll contributions and taxes, is devouring the economy.A February 2025 report from the Cour des Comptes, the national audit office, found that the pension system spends almost 14 % of gross domestic product on benefits—four percentage points more than Germany. Those contributions produced an average monthly pension of €1 626 and gave retirees a living standard similar to that of working people. French pensioners not only enjoy one of Europe’s highest replacement rates but also have one of the lowest poverty rates (3.6 %). The generosity comes at a price: the same audit calculated that the deficit across the various pension schemes will widen from €6.6 billion in 2025 to €15 billion by 2035 and €30 billion by 2045, adding roughly €470 billion to public debt. Raising the retirement age to 65 would help, but even that would yield only an extra €17.7 billion a year.The French model dates from the post‑war social contract, when four or five workers supported each pensioner. The demographic ratio has now fallen below two, and the number of pensioners is projected to rise from 17 million today to 23 million by 2050. Two‑thirds of the resources allocated to pensions already come from social security contributions, supplemented by a growing share of taxes. Employers’ labour costs are inflated because 28 % of payroll goes to pensioners, making French industry less competitive. Pensions absorb about a quarter of government spending, more than the state spends on education, defence, justice and infrastructure combined.Reform fatigue and political paralysisSuccessive administrations have tried to curb the rising bill but have been derailed by street protests and parliamentary rebellions. In April 2025 the Cour des Comptes bluntly warned that keeping the system unchanged is “impossible”; it argued that people must work longer and that pensions should be indexed more closely to wages rather than inflation. The 2023 reform, which is supposed to raise the statutory retirement age gradually from 62 to 64 by 2030, barely maintained balance until 2030 and did nothing to close the long‑term gap. When the government sought to postpone a routine pension hike to mid‑2025 to save €4 billion, opposition parties branded the proposal a theft from the elderly. Marine Le Pen’s far‑right National Rally and other groups blocked the measure, and even ministers within the governing coalition disavowed it. A 5.3 % pension increase granted in January 2024 to protect retirees from inflation cost €15 billion a year, wiping out most of the savings from pushing back the retirement age.Popular resistance is fuelled by the fact that French workers already retire earlier than almost anyone else in the European Union. Although the legal age is now 62, the effective retirement age is only 60.7 years. OECD data show that French men spend an average of 23.3 years in retirement, far longer than in Germany (18.8 years). The low retirement age and high replacement rate mean pensions replace a larger share of pre‑retirement income than in most countries. With a median voter now in their mid‑40s, governments have little incentive to antagonise older voters, leading to what economists call a “demographic capture” of democracy. Reforms are generally adopted only when markets force governments’ hands—Greece, Portugal and Sweden passed painful changes under the threat of financial collapse.Economic consequencesFrance’s public finances are straining under the weight of pension obligations. The country’s debt reached 114 % of GDP in June 2025, and interest payments are projected to exceed €100 billion by 2029, becoming the single largest budget item. In September 2025 Fitch downgraded France’s credit rating to A+, citing the lack of a clear plan to stabilise the debt. Political instability has made matters worse: Prime Minister François Bayrou was ousted in a no‑confidence vote in September after proposing a €44 billion deficit‑cutting plan. His successor, Sebastien Lecornu, immediately suspended the 2023 pension reform until after the 2027 presidential election, effectively throwing fiscal prudence out of the window to preserve his government. Investors now demand a higher risk premium on French bonds than on those of Spain or Greece.The escalating pension bill is crowding out spending on education, infrastructure and innovation, sapping France’s potential for future growth. Economists warn that the longer reform is delayed, the more abrupt and painful it will need to be. Raising the retirement age beyond 65, modifying the generous indexation to inflation, broadening the tax base and encouraging more people to work past 55 are options that could restore sustainability. Without such measures, the pension system will continue to devour the nation’s finances, leaving younger generations to shoulder an ever‑heavier burden.ConclusionFrance’s pension crisis is not unique in Europe, but its scale and political toxicity are. The system reflects a post‑war social contract that promised long, comfortable retirements financed by ever‑fewer workers. That contract is now broken. Auditors, economists and even some politicians agree that the status quo is unsustainable and that tough choices lie ahead. Yet the clash between an ageing electorate intent on defending its privileges and a political class unwilling to tell voters hard truths has created an impasse. Unless France confronts its demographic realities and curbs the generosity of its pension system, the country will remain caught in a fiscal doom loop where pensions devour its economy and there is nothing to be done—until the markets force change.