China Stimulus, Return of Lula, Quad Goals, Germany Dragging its Feet and the Week in Review

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China Stimulus, Return of Lula, Quad Goals, Germany Dragging its Feet and the Week in Review

Another week in the books! A few reminders: if you’re interested in Latin America, check out our new collaboration with the fine humans over at Visual Politik: an English/Spanish newsletter called LatamPolitik. It costs $5 bucks a month, so if you ever thought to yourself, “I’d really like to buy Perch a beer once a month,” now you have your chance! If you missed our latest podcast episode from Monday on all things Romania, check it out here. As always, if you or someone you know could use our services, e-mail us at Catch ya on the flip side.

China stimulus. Democrats are working on another round of stimulus legislation – but are planning to present a new spending bill not just as stimulus, but as a bill aimed at countering China’s economic influence by investing in U.S. industry.

What it means: Wouldn’t it be something if the U.S. government could find its way towards bipartisan investment in the things best for our country without having to resort to naming a boogeyman as the sole reason politicians should reach across the aisle?

The return of Lula. Brazil’s Federal Supreme Court (STF) Justice Edson Fachin overturned all four of former Brazilian President Luiz Inácio Lula da Silva’s corruptions on money-laundering and corruption charges.

What it means: Brazilian President Jair Bolsonaro has serious political competition for the first time since he came on the scene. An IPEC survey published earlier this week by O Estado de S. Paulo showed that 50% of respondents would cast their ballots for Lula if he is able to run. Brazilian politics, hardly for the faint of heart already, is going to get a lot more volatile heading into the 2022 elections.

Quad goals. The heads of state of the U.S., India, Australia, and Japan will meet virtually for a first-ever leaders’ meeting of the so-called “Quad” group. A U.S. official told Reuters that the Quad nations would announce a financing package to increase India’s COVID-19 vaccine manufacturing capacity and output. Nikkei reported the group also plans to build a rare-earth elements procurement chain to counter China’s dominance. Meanwhile, according to The Australian, momentum for a free trade agreement between Australia and India is “gaining momentum.”

What it means: The pivot of all this is India. Up until now, the Quad has been a poorly named, informal security dialogue – if the U.S., Japan, and Australia however can entice India into a de facto alliance structure with the promise of economic and political incentives, the Quad becomes something everyone is going to be talking about – and everyone in Beijing is going to be worried about. That’s easier said than done – India is not interested in playing the same role it did for the British Empire in the 19th century for the Quad’s other member states.

Germany dragging its feet. Germany’s Federal Court of Auditors (Bundesrechnungshof, or BRH…yikes!) published a report highly critical of the €750 billion COVID-19 recovery fund and concluded that it “could weaken the European Union as a community based on law and solidarity and could endanger the stability of the economic and monetary union.”

What it means: Germany is projected to be a net-payer into the EU recovery fund, to the tune of €66 billion. Spain and Italy, meanwhile, stand to receive €70.2 billion combined from the fund. That might sound unfair but remember – Germany gets to export its goods to everyone else in the EU and utilize the bloc’s cheap labor all for itself! If Germany isn’t willing to spend a measly €66 billion now and then to keep the EU together, there’s not much future for the bloc.

Honorable mention

RIP Walter LaFeber – one of the best to do it. Hail all hail.

Negotiators from the U.S. and South Korea agreed in principle on sharing the cost of U.S. military deployments in South Korea.

European Central Bank President Christine Lagarde said the ECB revised its inflation estimates upward – to 1.5 percent in 2021, 1.2 percent in 2022, and 1.4 percent in 2023.

Libya formed an interim unity government ahead of elections currently set for December.

Egyptian President Abdel-Fattah El Sisi traveled to Khartoum to meet with Sudanese Prime Minister Abdalla Hamdok.

Greece and Egypt agreed to compromise in a disagreement over oil and gas exploration in the eastern Mediterranean.