The Week Ahead

The Week Ahead

UN Secretary General attempts to reanimate peace talks. Kurdish referendum plans in limbo. Venezuela begins drafting a new constitution amid sanctions. German general election heats up. All in The Week Ahead.

UN Secretary General attempts to reanimate Israel-Palestine peace talks 

This week the UN Secretary General, Antonio Guterres, continues his travels in the Middle East, visiting Israel and the occupied Palestinian territories. Guterres has been seen as a moderate voice on the Israeli-Palestinian issue. He has supported Israel’s position at the UN, vowing to treat it “like any other state” and in March pushed to drop a UN report accusing Israel of being an apartheid state. However, he has also been critical of Israeli’s occupation of the West Bank.

Guterres’ will meet with Prime Minister Benjamin Netanyahu and President Reuven Rivlin and later with Mahmoud Abbas, leader of the Palestinian Authority as well as a host of representatives from civil society, universities, and UN agencies. This marks the Secretary General’s first trip to the region since taking office in January and is largely seen as an attempt to restart the peace process and resume negotiations aimed at achieving a two-state solution.

Kurdish referendum plans in limbo

This week, an Iraqi delegation may meet with Kurdish officials in an attempt to convince them to delay a planned referendum vote scheduled for 25 September. The United States, United Kingdom, Germany, Iran and Turkey have all come out against the timing of the referendum in recent months, believing it would be destabilizing force for the region, especially as a coalition of actors work to combat the Islamic State.

However, any attempt to dissuade Kurdish authorities this week is likely to prove unsuccessful unless allies are able to provide some form of concrete political recognition or a guarantee for the referendum at a set future date. Anything short of this in the form of more concessions from the Iraqi government would not be enough according to Kurdish officials. Thus far, Kurdish allies have failed to so. As the 25 September referendum date approaches it also becomes significantly unlikely that Kurdish authorities will postpone the referendum as any change now would appear weak and damage any political capital on the issue. In recent polling, the National Democratic Institute found that close to 96 percent of Kurds would support independence ahead of the vote. However, without the broader support and recognition of allies and the international community, even a successful referendum could hold little power.


Venezuela begins drafting a new constitution amid sanctions

This week, Venezuela’s Constituent Assembly will start work on revising the state constitution. The 545 member Assembly has drawn international condemnation as it is largely seen as an instrument to keep Maduro in power and cement his hold over the country’s political institutions. After its recent formation it was packed with Maduro supporters and has effectively seized all control from the opposition-led legislature. In addition to the new constitution, the Constituent Assembly continues to set up various committees to tackle the country’s pressing issues. The economy committee plans to present an initial round of proposals to Maduro this week, largely expected to deal with price speculations and the foreign exchange market.

Nicolas Maduro has also called a meeting this week between Venezuelan bond holders and the Economy Minister to discuss the ramifications of recent U.S. sanctions. Following what it sees as an increasingly dictatorial regime, the Trump administration heightened sanctions, effectively blocking buyers from acquiring any further government or state oil company debt. However, trading will still be allowed for existing bonds on secondary markets. This will help to protect American buyers who had previously bough Venezuelan debt such as Goldman Sachs which controversially bought almost 3 billion worth of Venezuelan government securities.


German general election heats up

This Sunday, German Chancellor, Angela Merkel, and Martin Schulz, leader of the central-left opposition Social Democrat Party (SPD) will appear for the first and only scheduled debate before the general election on September 24. Merkel saw a decline in support at the height of the refugee crisis in 2015. This combined with an initial surge in support for Martin Schulz who returned to Germany from the European Parliament, made a contested election more likely. However, Merkel has since recovered in the polls and SPD support has been waning, especially since its regional election loss in former stronghold North Rhine-Westphalia. Schultz has criticized Merkel of being “aloof,” weak on Donald Trump, and out of touch with ordinary Germans. However, he has largely been curtailed from criticizing government policy because of the junior partner role the SPD has played in Merkel’s governing coalition. For the most part, Merkel has refused to engage directly with Schulz and regularly doesn’t bring him up in interviews. Current opinion polls put Merkel’s Christian Democrat Party (CDU) at 40 percent and the SPD at 25 percent. Without a large debate gaff or large international crisis within the next three weeks before the election, it is increasingly expected that Merkel will remain chancellor for her fourth consecutive term.

The Week Ahead provides analytical foresight on the economic consequences of upcoming political developments. Covering a number of future occurrences across the globe, The Week Ahead presents a series of potential upside/downside risks, shedding light on how political decisions affect economic outcomes.

This edition of The Week Ahead was written by GRI Senior Editor Luke Iott.

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