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Mission Grey Daily Brief - February 24, 2025

Summary of the Global Situation for Businesses and Investors

As the third anniversary of Russia's invasion of Ukraine approaches, President Volodymyr Zelenskyy has offered to step down in exchange for NATO membership and lasting peace for his country. President Donald Trump has made concessions to Russia, including agreeing to normalise relations and excluding NATO membership for Ukraine. Meanwhile, Germany is facing a shift to the right in its federal election, with Elon Musk intervening in support of the far-right Alternative für Deutschland (AfD), sparking outrage and accusations of interference. In Gaza, Hamas has freed three more Israeli hostages, marking the final phase of the initial ceasefire agreement. Lastly, a suspected terrorist was arrested in France after killing one person and injuring five others in a knife rampage, prompting calls for stronger action against radicalisation and deportation failures.

Ukraine-Russia Conflict

The third anniversary of Russia's invasion of Ukraine is approaching, and the Ukrainian President Volodymyr Zelenskyy has made a startling offer to step down in exchange for NATO membership and lasting peace for his country. This offer comes amid rapid changes in U.S. foreign policy under President Donald Trump, who has made several concessions to Russia, including agreeing to normalise relations and excluding NATO membership for Ukraine.

Zelenskyy's offer is a sign of the extreme pressure he is under as the US hurries to hatch a peace deal with Moscow. The Trump administration has made several concessions to Russia, including agreeing to normalise relations after bilateral talks in Saudi Arabia last week, while excluding NATO membership for Ukraine. Trump described Zelenskyy as a "dictator" and blamed Kyiv, rather than Moscow, for starting the war.

Russia launched its biggest drone strike against Ukraine on Sunday, firing 267 drones against multiple targets across the country. Ukrainian officials say Washington is also trying to strong-arm Zelenskyy into signing a deal that would award the US large amounts of the proceeds from extracting Ukrainian mineral deposits. Zelenskyy has pushed back against the Trump administration's demands, rejecting the idea of a minerals "partnership" with the US and arguing that it would not provide adequate security guarantees.

Zelenskyy has expressed fears that Trump pushing a quick resolution would result in lost territory for Ukraine and vulnerability to future Russian aggression. Preparations are underway for a face-to-face meeting between Trump and Russian President Vladimir Putin, marking a clear departure from Western efforts to isolate Moscow over its war on Ukraine.

German Federal Election

Germany is facing a shift to the right in its federal election, with Elon Musk intervening in support of the far-right Alternative für Deutschland (AfD), sparking outrage and accusations of interference. Musk has repeatedly intervened in support of the AfD, including publishing a supportive guest opinion piece for the country's Welt am Sonntag newspaper and hosting a virtual encounter with AfD leader Alice Weidel.

Musk's open calls for German voters to back the AfD, which federal authorities classify as a suspected extremist party, have sparked outrage and accusations of troubling interference in Europe's top economy. Government spokesperson Christiane Hoffmann has confirmed that Musk is trying to influence the federal election.

Musk has often weighed in on German politics, even calling the chancellor, Olaf Scholz, a "fool" on his social media platform X. Last month, Musk made a supportive speech at a campaign event for the AfD in Halle, eastern Germany, telling attendees that Germany was too focused on past guilt and that the AfD was the best hope for the country.

Israel-Hamas Ceasefire

In Gaza, Hamas has freed three more Israeli hostages, marking the final phase of the initial ceasefire agreement. The six Israelis scheduled for release are Eliya Cohen, Omer Shem Tov, Omer Wenkert, Hisham Al-Sayed, Tal Shoham, and Averu Mengistu. Hamas handed over two Israeli hostages to the Red Cross, and three more Israeli hostages were escorted by masked, armed Hamas fighters and made to pose on a stage before hundreds of Palestinians in the central town of Nuseirat.

Israel is set to release 600 Palestinian prisoners who were detained from Gaza since October 7. Earlier in the day, the militant group finally handed over the body of Israeli hostage Shiri Bibas. Her family confirmed the identification, stating, "Last night, our Shiri was returned home." Initially, Hamas had claimed to have returned Bibas' remains alongside those of her two sons and another hostage on Thursday. However, forensic tests revealed that the body said to be hers was, in fact, that of an unidentified Palestinian woman.

Netanyahu strongly criticised the group, stating in a video message that "In an unspeakably cynical way, they did not return Shiri to her little children, the little angels, and they put the body of a Gazan woman in a coffin. We will act with determination to bring Shiri home along with all our hostages - both living and dead - and ensure that Hamas pays the full price for this cruel and vicious violation of the agreement."

France Terrorist Attack

A suspected terrorist was arrested in France after killing one person and injuring five others in a knife rampage, prompting calls for stronger action against radicalisation and deportation failures. The suspect was reportedly on France's Terrorist Radicalization Prevention Reporting File (FSPRT) and had previously been sentenced to six months in prison for posting a social media video calling for jihad, or "holy war".

French President Emmanuel Macron has since declared the incident "an Islamist terrorist act" and vowed to continue efforts "to eradicate terrorism on our soil." Far-right politicians were quick to slam the government's handling of radicalisation and deportation failures, calling for stronger action to control borders, strip jihadists of citizenship, expel radical imams, and sever ties with nations that support fundamentalists.

Saturday's horrific rampage follows a string of Islamist attacks in Europe, including a Syrian refugee in Berlin allegedly attempting to slit the throat of a Spanish tourist at the Holocaust Memorial and an Afghan asylum seeker ploughing his car into a crowd of demonstrators in Munich, killing a mother and her two-year-old daughter.


Further Reading:

German election live: voters head to polls amid fears over Ukraine security, Trump and rise of far right

Hamas frees 3 more Israeli hostages

Moment suspected ‘terrorist’ is arrested after killing one and injuring 5 in horror knife rampage in French town

Russia launches largest drone attack on Ukraine on eve of third year of war

Three More Israeli Hostages Freed By Hamas As Gaza Ceasefire Deal Advances

Trump-Putin summit preparations are underway, Russia says

Zelenskyy Says 'Ready To Step Down' As President In Exchange For NATO Membership For Ukraine

Zelenskyy offers to step down in exchange for peace and Nato membership

Zelenskyy offers to step down in exchange for peace and Ukraine’s Nato membership

Themes around the World:

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Dual-Use Export Controls Expansion

China’s expanded controls on dual-use items—goods with civilian and military applications—target Japan and other countries over security concerns. These measures disrupt technology, aerospace, and defense supply chains, and signal China’s willingness to weaponize trade in geopolitical disputes.

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Fiscal Policy and Tax Reform Uncertainty

South Africa faces potential tax increases, including VAT and digital economy taxes, to address revenue shortfalls. Fiscal consolidation and improved ratings have boosted investor sentiment, but persistent debt and policy uncertainty could impact future investment strategies and operational costs.

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Infrastructure Investment Drives Construction Boom

US infrastructure spending, supported by federal and state initiatives, is fueling robust growth in construction and heavy equipment markets. This trend supports supply chain modernization and creates opportunities for global suppliers, though regulatory and environmental uncertainties persist.

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Export-Led Growth Ambitions Face Constraints

Pakistan targets $60 billion in exports by 2030, but structural financial constraints—such as government dominance in banking, high energy costs, and weak credit for exporters—limit competitiveness. Achieving export goals requires deep reforms in fiscal, monetary, and industrial policy to unlock sustainable growth.

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Geopolitical Pressures On US Allies

China’s escalation of trade controls against Japan tests US support for key allies and disrupts critical industries. These pressures complicate regional alliances, impact supply chains, and heighten risks for multinational firms operating in East Asia and North America.

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Regional Instability and Border Risks

Myanmar’s ongoing civil conflict and border instability disrupt cross-border trade, increase security risks, and drive refugee flows into Thailand. These factors create operational uncertainties for businesses with supply chains or investments near the border, necessitating enhanced contingency planning.

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State-Level Investment Realignment

States like Andhra Pradesh, Odisha, and Maharashtra now attract over 50% of new investments, driven by reforms, infrastructure, and policy clarity. This geographic shift is creating new industrial hubs and altering supply chain and investment strategies for international businesses.

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Defense Industry and Sanctions Dynamics

Turkey’s exclusion from the US F-35 program and ongoing defense industry sanctions affect technology transfers and procurement. Efforts to rejoin the program and possible return of Russian S-400 systems highlight ongoing risks for defense sector investments and international partnerships.

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Massive Economic Support and Reconstruction

International partners have agreed on a €682 billion, ten-year economic support package for Ukraine, targeting reconstruction, compensation, and reforms for EU accession. This unprecedented aid will drive infrastructure renewal and attract foreign investment, reshaping Ukraine’s postwar economy.

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Transport and Infrastructure Modernization

Major upgrades in ports, roads, and public transport—including the Red Sea Container Terminal and high-speed rail—align with Egypt Vision 2030. These projects enhance Egypt’s logistics capabilities, regional connectivity, and competitiveness, supporting trade, tourism, and investment flows.

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Currency Volatility and Financial Markets

Fluctuations in the Brazilian real and financial market volatility pose risks for international investors and businesses engaged in trade. Currency instability affects pricing, profit margins, and hedging strategies, necessitating careful financial planning and risk management.

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Climate Policy Drives Business Transition

Australia’s climate commitments and green transition policies are reshaping investment strategies, especially in energy, mining, and infrastructure. Businesses must adapt to evolving regulations and ESG standards, with opportunities in renewables and risks in carbon-intensive sectors.

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Fiscal Strain and Wartime Economy

Russia’s GDP growth has slowed to 0.1%, with industrial output declining and inflation rising. The government is raising taxes and pushing for economic formalization to offset war-related spending and sanctions-induced budget gaps, impacting domestic and foreign business operations.

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Currency Controls and Ruble Weakness

Reduced oil revenues and lower central bank FX sales are weakening the ruble. Currency controls and capital restrictions complicate cross-border transactions, profit repatriation, and risk management for foreign enterprises operating in Russia.

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Indigenous Inclusion and Project Legitimacy

Indigenous partnership is increasingly central to resource and infrastructure development. Legal challenges, demands for meaningful consent, and environmental stewardship shape project viability, requiring businesses to prioritize Indigenous engagement for operational certainty and social license.

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Regulatory and Fiscal Policy Evolution

Ongoing reforms in GST, tax policy, and fiscal decentralization are shaping India’s investment climate. States are seeking greater fiscal autonomy and infrastructure funding, while regulatory changes continue to impact business operations, compliance, and long-term strategic planning.

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Infrastructure Investment and Public Finance

Vietnam is launching a new wave of infrastructure projects, targeting $5.5 billion in foreign loans for 2026 and up to $38 billion by 2030. While these investments aim to support growth and connectivity, persistent disbursement delays, land clearance issues, and public debt management remain key operational risks.

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Political Uncertainty and Budget Delays

Delays in passing Taiwan's defense budget threaten procurement, maintenance, and deterrence capabilities. Legislative gridlock could undermine Taiwan's military readiness and resilience, increasing vulnerability to external pressure and affecting long-term business stability and investment planning.

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Supply Chain Diversification And Regionalization

Global supply chains are diversifying away from both US and China dependencies, driven by tariffs, sanctions, and geopolitical risks. Regional integration and technological advances are enabling new trade models, affecting sourcing, logistics, and risk management for international businesses.

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Startup Ecosystem and Venture Investment Surge

South Korea’s government-led support for startups, highlighted at CES 2026, is fostering innovation in AI, deep-tech, and mobility. Seoul’s global ranking and record FDI inflows signal robust opportunities for venture capital, partnerships, and technology-driven business models.

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Energy Transition Drives High Costs

Germany’s shift away from Russian energy and nuclear power has resulted in persistently high energy prices and supply insecurity. This undermines industrial competitiveness, deters investment, and increases vulnerability in critical infrastructure, with significant implications for energy-intensive sectors and supply chains.

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Regional Energy Partnerships and Gas Hub Role

Egypt is leveraging its infrastructure to become a regional energy hub, signing supply and cooperation agreements with Israel, Cyprus, Qatar, and Syria. These partnerships support energy security, regional integration, and cross-border investment, but depend on stable infrastructure and geopolitical conditions.

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State-Level Competition for Investment

States like Andhra Pradesh, Odisha, and Maharashtra are aggressively attracting investment, with Andhra Pradesh capturing 25.3% of proposed investments in FY26. This regional competition, driven by policy clarity and infrastructure, is reshaping India’s industrial geography and offering new opportunities for international investors.

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Export Diversification and Market Shifts

Korean authorities are intensifying efforts to diversify exports beyond semiconductors and autos, targeting new markets in Latin America, Africa, and advanced industries. This aims to mitigate risks from overreliance on a few sectors and address declining competitiveness in steel and machinery.

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State Intervention and Industrial Subsidies

The German government is expanding subsidies for new gas-fired power plants and industrial electricity, with €12 billion approved by the EU. While intended to ease energy costs and support heavy industry, these measures raise concerns about long-term fiscal sustainability and market distortions.

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Currency Volatility and Economic Pressures

Turkey faces persistent currency volatility and high living costs, challenging business planning and profitability. While public discontent remains muted, inflation and exchange rate fluctuations increase financial risk for international investors and complicate cross-border transactions.

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Geopolitical Tensions Shape Strategic Choices

Persistent border militarization and economic interdependence with China, plus regional instability, compel India to compartmentalize security and trade. Strategic diversification of supply chains and partnerships is essential for mitigating risks from global conflicts and maintaining operational continuity.

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Financial Sector Resilience and Volatility

UK banking and financial stocks have rebounded strongly, buoyed by higher interest rates and global demand. However, sector volatility persists, especially in consumer-facing and media stocks, requiring careful risk management for international investors.

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Surge in M&A and Privatization Activity

Mergers and acquisitions doubled in 2025, reaching $11.8 billion, with foreign investors—especially from Germany and France—leading 55 deals. Privatizations, notably in energy and infrastructure, offer new entry points and competitive dynamics for global investors.

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Geopolitical Security Concerns

Heightened geopolitical risks, including cyber threats and military tensions, affect the security landscape for US businesses. These concerns necessitate increased investment in risk management and contingency planning to safeguard assets and supply chains.

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Canadian LNG Expansion and Global Energy Role

Canada is accelerating LNG export capacity, aiming to become a top-six global exporter by 2030. Multiple projects are underway, but face challenges from global supply gluts, environmental opposition, and Indigenous stakeholder negotiations, affecting long-term investment and trade opportunities.

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Foreign Investment Scrutiny Tightens

Regulatory bodies like CFIUS are rigorously scrutinizing foreign investments, especially in technology, agriculture, and energy. Stricter review processes and new reporting requirements raise barriers and delay cross-border deals.

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Electric Vehicle Supply Chain Opportunities

The USMCA review is expected to expand Mexico’s role in electric vehicle (EV) supply chains. Mexico already supplies key EV components and seeks further investment in battery and charging infrastructure, positioning itself as a critical North American hub for electromobility.

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Geopolitical Realignment and Indo-German Partnership

Germany is deepening its strategic partnership with India, signing 19 agreements on defense, technology, critical minerals, and green energy. This realignment aims to reduce reliance on China and Russia, enhance supply chain resilience, and position Germany as a key player in the Indo-Pacific region.

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Declining Foreign Investment and Policy Uncertainty

Foreign direct investment dropped 82% year-on-year, reflecting high taxes, inconsistent regulation, and bureaucratic inefficiencies. The Special Investment Facilitation Council (SIFC) aims to streamline approvals, but investor confidence remains fragile, impacting long-term capital flows and supply chain decisions.

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Foreign Aid and Investment Inflows

Significant international financial aid and investment aimed at stabilizing Ukraine influence economic resilience and reconstruction. These inflows affect market dynamics and create opportunities for strategic partnerships in various sectors.