Mission Grey Daily Brief - June 10, 2024
Global Briefing
The world is witnessing a complex interplay of geopolitical and geoeconomic dynamics. From the ongoing war in Ukraine to the far-right gains in the EU elections, the global landscape is undergoing significant shifts. Here is today's global briefing:
Ukraine-Russia War
Russia's military offensive in Ukraine's northeast Kharkiv region has stalled, with Ukrainian forces inflicting heavy losses on Russian troops. With billions of dollars in new military aid from the US and Europe, Ukraine's hand is being strengthened. However, Russia continues to launch attacks on Ukrainian cities, targeting energy infrastructure. The war has entered a stalemate, and Ukraine and its allies face the challenge of sustaining resistance.
Far-Right Gains in EU Elections
The far-right has made significant gains in the European Union parliamentary elections, dealing defeats to French President Emmanuel Macron and German Chancellor Olaf Scholz. In France, the far-right National Rally party dominated, prompting Macron to dissolve the parliament and call for snap elections. In Germany, the far-right Alternative for Germany surged past the governing coalition. These elections will shift the EU to the right and may hinder its ability to pass legislation.
Belgium's Political Landscape
Following the Flemish nationalist parties' win in the federal election, Belgium is facing complex coalition talks. The AKP-MHP rivalry, which forms the ruling bloc, may intensify, raising questions about an early election.
China-Russia Relations
Amid tensions with the West, Russia is seeking to strengthen its ties with China. Kremlin spokesperson Dmitry Peskov stated that Turkey could become a member of BRICS, an idea that China and Russia have differing views on.
Kenya's Intervention in Haiti
Kenya has deployed police officers to Haiti to assist in restoring law and order amid the country's gang crisis. This intervention, led by the Multinational Security Support (MSS) mission, aims to protect critical infrastructure, manage borders, and conduct anti-gang operations. However, the mission faces challenges due to community distrust and resistance from Haitian gangs.
Armenia's Economic Challenges
Armenia's goods exports declined by 14.3% in the first quarter of 2024. Additionally, the country is facing a decrease in tourist flow. These economic setbacks come amidst efforts to restore Armenia's railway infrastructure, which was damaged by floods.
Indonesia's Mining Permits
Indonesia's President Joko Widodo has sparked controversy by granting mining permits to religious groups, including the country's largest Muslim organization, Nahdlatul Ulama. This move has been criticized as transactional politics, with some arguing that it undermines environmental sustainability.
New Caledonia's Unrest
People in New Caledonia are disappointed that the recent riots have been overshadowed by the upcoming Parliament elections and the Olympic Games. The European elections will go ahead as scheduled, with additional security deployed. However, the French media has stopped reporting on the territory, leading to feelings of abandonment among the locals.
Bulgaria's Political Turmoil
Bulgaria is facing its sixth parliamentary election in three years, with no party expected to win a majority. The country has been plagued by unstable governments and economic reforms remain stalled.
US-France Relations
US President Joe Biden concluded a state visit to France, celebrating the strong alliance between the two nations. Biden and French President Emmanuel Macron discussed their support for Ukraine and addressed the conflict between Israel and Hamas. Biden also honored US war dead at a cemetery, marking a contrast with former President Trump, who had skipped a similar visit.
Further Reading:
A long, hot summer for Türkiye - Yetkin Report
Biden heralds close US-France ties as he’s treated to a state visit - CNN
Bulgaria holds another snap election, more instability seen ahead - ThePrint
EU elections, Olympics overshadow New Caledonia crisis - Cook Islands News
French far right obliterates Macron's party in EU election - POLITICO Europe
How Kenya can succeed in troubled Haiti - Nation
Macron Dissolves Parliament, Calls Snap Elections In France On June 30 - NDTV
Themes around the World:
Tariff Policy and China Trade Dynamics
Mexico’s export growth to the US persists despite tariff tensions, with effective rates around 3.5%—far lower than China’s 32%. Mexico’s alignment with US protectionist measures against China strengthens its position as America’s top trading partner, but exposes it to policy volatility.
Labor Shortages Drive Immigration Policy Shifts
Persistent skilled labor shortages are prompting Germany to expand ethical pathways for foreign workers, notably from India. This trend is vital for modular sector growth, affecting project delivery, wage structures, and operational scalability for international investors.
Consumption tax reform rollout
Implementation of the new dual VAT (CBS/IBS) and selective tax advances, with a testing phase starting in 2026 and long transition. Firms face significant ERP, pricing, contracting and cash‑flow changes as non-cumulativity expands and sectoral carve‑outs evolve.
External financing and conditionality
Ukraine’s budget and defense sustainability depend on large official flows, including an EU-agreed €90 billion loan and an IMF Extended Fund Facility. Disbursements carry procurement, governance, and reform conditions; delays or missed benchmarks can disrupt public payments and project pipelines.
Sanctions enforcement intensifies at sea
UK and allies are escalating action against Russia’s ‘shadow fleet’, including interdictions, proposed boarding powers and broader maritime-services bans. Shipping, insurers, traders and banks face higher compliance burdens, detention risk, route disruption and potentially higher freight and war-risk premiums.
Export-Led Growth and Trade Policy Shifts
Ambitious targets to double exports to $60 billion hinge on tax reforms, trade facilitation, and sectoral diversification. However, high energy costs, regulatory bottlenecks, and financial system distortions still hinder export competitiveness, making sustained reform execution critical for international trade expansion.
Tourism recovery with demand mix risks
Tourism is near recovery: Phuket passengers rebounded to 96.4% of 2019 and arrivals Jan 1–25 reached 2.63m (≈THB129.9bn). However, China remains volatile and room-rate power is limited, affecting retail, hospitality capex, labor demand, and services supply chains.
Tighter tax audits and customs scrutiny
SAT is intensifying enforcement against fake invoicing and trade misvaluation, using CFDI data to trigger faster audits and focusing on import/export inconsistencies and improper refunds. Compliance burdens rise for multinationals, making vendor due diligence, transfer pricing and customs documentation more critical.
Infrastructure Expansion and Logistics Modernization
India’s 2026-27 budget prioritizes accelerated investment in highways, ports, and digital infrastructure. Initiatives like Gati Shakti have reduced logistics costs below 10% of GDP, improving supply chain efficiency and global competitiveness, and supporting the goal of becoming a $5 trillion economy.
Foreign Investment Faces High Uncertainty
Foreign direct investment in Ukraine remains subdued, with FDI at only 0.9% of GDP in late 2025. Investors are cautious due to security risks, regulatory instability, and infrastructure damage, though reconstruction initiatives offer selective opportunities for risk-tolerant capital.
Foreign Investment and Real Estate Growth
Australia’s real estate market is projected to reach USD 306 billion by 2034, driven by population growth, infrastructure investment, and foreign capital. Government incentives and AI-driven innovation are reshaping property markets, but regulatory changes and housing affordability remain critical factors for investors.
Geopolitical Uncertainty and Peace Negotiations
US-brokered peace talks with Russia continue, but unresolved issues over territorial concessions and security guarantees create deep uncertainty for investors. The outcome will shape Ukraine’s future market access, reconstruction, and integration with the EU.
Environmental Enforcement and Permit Revocations
Indonesia has revoked permits for 28 companies, mainly in forestry, mining, and plantations, due to illegal deforestation and environmental violations. This signals stricter enforcement, affecting supply chains and compliance costs for resource-dependent industries.
Gas expansion and contested offshore resources
Saudi Arabia and Kuwait are advancing the Dorra/Durra offshore gas project, targeting 1 bcf/d gas and 84,000 bpd condensate, despite Iran’s claims. EPC and consultancy tenders are moving, creating opportunities but adding geopolitical, legal, and security risk to contracts.
Mass Protests and Political Instability
Widespread protests since late 2025, met with violent crackdowns and internet blackouts, have resulted in thousands of deaths and tens of thousands of arrests. The unrest reflects deep societal grievances, undermines regime legitimacy, and creates unpredictable risks for business continuity and investment.
Escalating Sanctions Disrupt Trade Flows
Intensified US and EU sanctions, including on shipping, oil, and digital assets, severely restrict Iran’s access to global markets. These measures complicate cross-border transactions, increase compliance risks, and force businesses to navigate opaque networks, raising operational and reputational risks.
National Privatization Strategy Expands PPPs
The new National Privatization Strategy aims to sign over 220 public-private partnership contracts and mobilize $64 billion in private investment by 2030. This initiative opens infrastructure, health, education, and logistics to foreign investors, enhancing competitiveness and operational efficiency.
Industriewandel Auto- und EV-Markt
Die Re-Industrialisierung des Autosektors wird durch Politik und Nachfrage geprägt: Neue E-Auto-Förderung 2026–2029 umfasst 3 Mrd. € und Zuschüsse von 1.500–6.000 € (einkommensabhängig). Das verschiebt Absatzplanung, Batterielieferketten, Handelsstrategien und Wettbewerb, inkl. chinesischer Anbieter.
War-risk insurance capacity expands
New DFC-backed war-risk reinsurance facilities (e.g., $25 million capacity supporting up to $100 million limits) are gradually improving insurability for assets and cargo in Ukraine. Better coverage can unlock FDI and reconstruction contracts, but pricing, exclusions, and geographic limits remain tight.
Strategic Role in European Value Chains
Turkey is deeply embedded in EU value chains, especially in automotive, machinery, textiles, and electronics. Its manufacturing and logistics capacity, combined with energy corridor status, make it a strategic partner for Europe’s competitiveness and supply chain resilience.
Transactional deal-making with allies
Washington is increasingly using tariff threats to extract investment and market-access commitments from partners, affecting sectors like autos, pharma, and lumber. Businesses should anticipate rapid policy shifts tied to negotiations, with material implications for location decisions, sourcing, and pricing in key allied markets.
Energy transition supply-chain frictions
Rising restrictions and tariffs targeting Chinese-origin batteries and energy storage (e.g., FEOC rules, higher Section 301 tariffs) are forcing earlier compliance screening, origin tracing, and dual-sourcing—impacting project finance, delivery schedules, and total installed costs globally.
Infrastructure Concessions Drive Investment Surge
A record wave of infrastructure concessions—50 auctions in 2023-2025—has attracted over R$229 billion in private investment, especially in ports, highways, and energy. This shift to private sector-led development is improving logistics but also exposes projects to regulatory, financial, and execution risks.
Currency Collapse and Hyperinflation
Iran's rial has plunged to record lows, now trading at 1.4–1.5 million per US dollar, with inflation nearing 50%. This currency crisis, driven by sanctions, mismanagement, and corruption, has triggered mass protests, eroded purchasing power, and created severe import and operational challenges for businesses.
AUKUS and Indo-Pacific Security Dynamics
Australia’s deepening defense ties with the US and UK through AUKUS reinforce its strategic role in the Indo-Pacific. This alliance supports supply chain security and regional stability, but also increases expectations for Australia’s defense spending and self-reliance amid rising China-US competition.
Energy policy and OPEC+ restraint
Saudi-led OPEC+ is keeping output hikes paused through March 2026, maintaining quotas amid surplus concerns and Iran-related volatility. For businesses, oil revenue sensitivity influences public spending, FX liquidity, project pacing, and input costs, especially energy-intensive industries.
Escalating sanctions and secondary risk
The EU’s 20th package expands energy, banking and trade restrictions, adding 43 shadow-fleet vessels (around 640 total) plus more regional and third‑country banks. This raises secondary-sanctions exposure, contract frustration risk, and compliance costs for global firms transacting with Russia-linked counterparts.
Orta Koridor lojistik fırsatı
Trans-Hazar Orta Koridoru, Çin‑Avrupa transit süresini deniz yolundaki 35–50 günden 18–25 güne düşürebiliyor. Türkiye’nin demiryolu/liman bağlantıları, depolama ve gümrük verimliliği yatırımları önem kazanıyor; kapasite darboğazı ve sınır geçiş gecikmeleri operasyonel risk.
Critical Minerals and Supply Chain Security
Escalating tensions with China have led to stricter Chinese export controls on rare earths and critical minerals, exposing Japan’s supply chain vulnerabilities. Japan is accelerating diversification efforts with G7, EU, and Indo-Pacific partners to secure stable access, impacting manufacturing, EVs, and high-tech sectors.
Labor Market Saudization Intensifies
The government has raised Saudization rates to 60% in key private sector roles, including marketing and sales, and restricted senior positions to nationals. These measures impact expatriate hiring, increase compliance costs, and require strategic workforce adjustments for international businesses.
FX regime and pricing pass-through
Authorities emphasize market-driven FX and inflation targeting, reducing reliance on defending a specific rate. For investors and traders, this improves transparency but raises short-term earnings and contract risks via exchange-rate volatility, repricing cycles, and hedging costs.
Trade Policy Uncertainty and FTA Utilization
Ongoing trade negotiations, particularly with the US and India, create uncertainty for exporters. Only 54% of eligible Thai exporters use FTA benefits, prompting government efforts to streamline certification, diversify markets, and expand mutual recognition agreements to enhance trade resilience.
Higher-for-longer interest rates
The Federal Reserve is pausing further rate cuts with inflation still pressured partly by tariffs. Elevated funding costs and a stronger risk premium weigh on capex, real estate, and leveraged trade finance, while FX volatility complicates pricing, hedging, and repatriation strategies.
Defense build-up reshapes industry
La hausse des crédits militaires (+6,5 à +6,7 Md€, budget armées ~57,2 Md€) accélère commandes (sous-marins, blindés, missiles) et renforce exigences de conformité, sécurité et souveraineté. Opportunités pour fournisseurs, mais arbitrages budgétaires pèsent sur autres programmes d’investissement.
EU Green Deal and Carbon Border Adjustment
The EU’s Carbon Border Adjustment Mechanism (CBAM), effective from January 2026, imposes new costs and compliance requirements on Turkish exporters of carbon-intensive goods. Sectors such as steel, cement, and chemicals face increased regulatory scrutiny, affecting export competitiveness and supply chain strategies.
Semiconductor Supply Chain Resilience
Japan is accelerating investment in domestic and allied semiconductor capacity, with TSMC's Kumamoto expansion and TOPPAN's new lines. The sector is driven by AI demand, strategic 'de-China' moves, and advanced process upgrades, reshaping global supply chains and investment flows.