• Risk iStock_000016809464SmallBotswana – general elections tomorrow are likely to return the long-ruling President Khama and his BDP to power, but with a diminished majority;
  • Italy – the European Commission has misgivings about PM Renzi’s budget;
  • Switzerland – banks have problems with the US Justice Department’s demands.

INDIA:  Prime Minister Modi may not be as quick and aggressive with his economic reform program as some had hoped, but he is pushing in the right direction. Victories by his party in state elections will make the job easier. His selection of a new chief economic adviser is encouraging.

JAPAN: The resignation of two Cabinet members is a painful blow for Prime Minister Abe, just as he is struggling with the decision whether to go ahead with his planned second increase in the VAT or not. The political troubles are unlikely to fade anytime soon. Neither will the economic difficulties.

NIGERIA:  The country’s oil exports to the United States have stopped, but this will not have nearly as much of an economic impact as one might suspect… In the political arena, there is talk that a truce agreement with the Boko Haram Islamic jihadists is underway, but this seems rather difficult to accept at face value.

SPAIN: Prime Minister Mariano Rajoy no doubt learned with relief of Catalan President Artur Mas’s decision to call off plans for an independence referendum on November 9, but this is a tactical retreat only, which does not resolve the issue. The Spanish economy is still getting hurt.

SWEDEN:  As the plans of the new government become clearer, the indications of the Left’s influence are growing. So are the limitations of what the administration can do without a parliamentary majority and while it is worrying about national security… An interest rate cut by the Riksbank to zero is no longer out of the question.

TURKEY:  Ankara’s long insistence on a spectator role in the battle for Kobani is based on reasons not nearly as illogical as many have made them out to be. Nonetheless, the pressure on Turkey to change course has become irresistible, and the question now is whether there is still a chance for a peace pact with its own Kurds.

UKRAINE:  The elections will produce a parliament clear of loyalists of the ousted Yanukovich, but this will not change the fact that the war in the Donbas region is turning into a “frozen conflict” of precisely the kind that Russia needs to control a sizeable chunk of Ukraine. The country is in dire need of more financial support from abroad.

VENEZUELA:  The steep oil price fall is hitting the country hard, so much so that speculation has grown over when, rather than whether, a debt default will become inevitable. The regime is fighting back with statist measures such as food rationing, but this does not work well even in the short run.

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