• Argentina – gas & water subsidies will be reduced;
  • El Salvador – the Left wins the elections;
  • Estonia – a new government, under threat from Russia;
  • Lithuania – a strong performance;
  • Ukraine – agreement on a massive bailout.

BRAZIL:  The government is irked by the ratings downgrade from S&P’s, but the economy is weak and it is hard to see where, in the near term, growth impulses are to come from. Pres. Rousseff is still leading in the runup to the October elections, but the outcome of the race is not a given.

EGYPT:  Field Marshal al-Sisi, who has just announced his intention to run for president, is likely to win. He will face a host of challenges, of which the precarious state of public finances will be a major one. For now the government can still borrow and it benefits from massive aid from abroad.

FRANCE: The setback suffered by the government in nation-wide municipal elections underscored a general decline in its popularity as well as frustration with the state of the economy. President Hollande is now changing tack, but it may be politically too late for him. The economy continues to languish, weighed down by heavy taxation and debt.

IRELAND:  The country that emerged last December from its EU/IMF-supported  bailout program is in a much stronger position than the Ireland that entered the three-year rescue deal.  The authorities are now looking to cut taxes to make life easier for the heavily tested citizens.  Important challenges remain, however, so Ireland will have to press on with reforms.

RUSSIA: The effects of the sanctions are more significant than many of the media reports would have one believe. Since the Kremlin is unlikely to curb its territorial ambitions, the regime will almost certainly be tightened, with seriously negative consequences for businesses on both sides.

 SLOVENIA:  The government seems determined to convince the world that Slovenia needs no outside help but can take care of its own financial problems.  It is up against some real difficulties, however, and still has to prove that it can manage. There is no sign, yet, that its recession is ending.

TURKEY:  The municipal elections this coming Sunday could have a significant influence on Prime Minister Erdogan’s future, which has become beclouded by a graft crisis, an ill-considered attempt to silence Twitter, the downing of a Syrian jet, and increasing scrutiny of the credit ratings of Turkish banks. Of particular consequence will be the contest in Istanbul.

VENEZUELA:  Sicad 2 has gone into operation, but there are already doubts as to whether it will do much to ease the pervasive shortages of hard currency. Ultimately, everything will depend on the volume of foreign exchange that will be made available through this outlet, and there are already indications that it will not enough.

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