Third Quarter Forecast Preview (Dispatch)
Video Transcript:
Video Transcript
Stratfor's third quarter forecast will be published on July 16. In today's Dispatch, I'd like to share with our viewers the highlights of the issues we'll be tracking in the coming months.
There are three critical areas of the world that are undergoing major transformations. Europe is, of course, at the top of that list. The media will be engrossed with the speeches that follow countless EU summits on how to deepen EU integration and alleviate the crisis. But the issue that we'll be focused on is the growing divergence between France and Germany.
This relationship represents the very foundation of the European Union, and we expect it to come under increasing strain as economic, social and political pressures rise at home and across the Continent. These pressures are not to the point where we expect the Franco-German relationship to break this quarter, but the divergence between these two powers will become a lot more visible.
At the same time, we'll continue to see persistent calls for deeper EU integration to calm the markets and give the appearance that the European elite will overcome their national differences to find a solution to the crisis.
Bear in mind that integration is defined very differently depending on where you sit on the Continent. The peripheral countries will call for more integration so they can continue to receive financial assistance, while the northern industrial countries will push for integration to assert more control over member nations and protect the common market for their exports.
There are many contradictions embedded in these proposals, but -- at least for this quarter -- those fundamental differences will be contained.
The Middle East will also garner a great deal of attention this quarter, as a U.S.-backed regional campaign against Iran intensifies. Military posturing and sanctions rhetoric will continue, but we don't expect a military conflict in the Persian Gulf. The center of attention will be Syria, where the Alawite regime's Sunni patronage network is starting to melt away.
The Alawite core is still holding together, but as high-level defections increase in the coming weeks, the probability of a palace coup will also rise. This means we will see a quiet struggle between Iran and Russia on one side, and the U.S., Turkey and Saudi Arabia on the other, in trying to shape a post-Assad regime that protects their individual interests.
Turkey will be cautious in its policy toward Syria and will shy away from unilateral military intervention. Meanwhile, Turkey will be making some very quiet, but strategic energy moves in Iraq to roll back Iranian influence.
We'll also be keeping a close eye on China. The Communist Party leadership is attempting a very tough balancing act between managing an economic slowdown and trying to ensure a stable leadership transition later in the year. The Bo Xilai case that grabbed a lot of attention and raised serious questions of Party unity this past quarter, will be dealt with decisively this quarter as the Party tries to shore up its credibility.
Behind the scenes, intensifying debates over how to manage the country's growing economic crisis will continue to fuel a political power struggle. This means that we can expect the government to engage in more short-term solutions to maintain stability while delaying action on more serious issues. These measures will continue to erode China's political and economic foundation.
Our third quarter forecast covers many more issues, from Russian activity in the Baltic states to U.S. negotiations with Pakistan and the Taliban to Venezuela's impending political transition. Watch for the full release July 16, and we look forward to your feedback.
