Summer of discontent

Germany produced a record amount of electricity from solar yesterday. [View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( Having left parts of southern Europe in flames, the continental heatwave is bearing down on the British Isles. That may be a boon for UK seaside resorts, but it’s not a cause for celebration. The Met Office has issued a red alert warning for this week, with southern England bracing for temperatures of 40 degrees Celsius (104 Fahrenheit) or higher from today. Key reading: - [Europe Counts Cost of Wildfires as UK Braces for Record Heatwave]( - [London to Bake In 40-Degree Heat. Get Used to It]( - [European Gas Prices Jump as Heat Wave Boosts Cooling Demand]( - [2022 Will Be the Year Summer Got Serious: Theme of the Week]( Record heat spells are less one-off events than a foretaste of what is to come as long as the world continues to burn more fossil fuels, adding greenhouse gases to the atmosphere. Yet that is precisely what is happening as a result of President Vladimir Putin’s war on Ukraine. The US is pressing for more oil production to curb gasoline prices inflated by the invasion, while Europe builds liquefied natural gas infrastructure and fires up coal-powered plants in the rush to replace Russian energy supplies. It’s not all doom and gloom. As Europe twins its LNG plans with redoubled efforts to transition to clean energy, Germany produced a record amount of electricity from solar yesterday, and is set to exceed that again this week as temperatures peak. On balance, the heatwave is still worsening Europe’s energy crisis. High water temperatures are curbing French nuclear capacity, while drought means some German coal-fired plants are unable to get fuel delivered by river. Natural gas prices jumped as demand for cooling rose. Amid a drawn-out war in Ukraine, with food and fuel prices rampant and recession fears on the rise, a period of sunshine will be enjoyed by many, especially in dank Britain. And yet the present heatwave may come to symbolize what’s shaping up to be a long, hot summer of discontent in Europe. — [Alan Crawford]( Firefighters tackle a forest fire in northern Portugal on Friday. Photographer: Patricia de Melo Moreira/AFP/Getty Images Click [here]( to sign up for The Readout with Allegra Stratton, your guide to the stories that matter for the UK. You can also share this newsletter with others. They can sign up [here](. Global Headlines Crunch time | Business lobbies and political allies are urging Prime Minister Mario Draghi to [reverse]( his pledge to resign to avoid throwing Italy into chaos at a time of growing economic challenges. Draghi still has until Wednesday to change his decision, which was prompted when a coalition partner failed to support his government in a confidence vote last week. - Center-right parties said yesterday their alliance backing Draghi is [broken](, a sign that Italy’s biggest political forces are getting ready for snap elections. Investment pariah | China has been attracting foreign capital for years, but now President Xi Jinping is facing the risk of a period of financial [de-globalization]( due to his own policies. [Sofia Horta e Costa]( outlines a raft of reasons — from unpredictable regulatory campaigns and economic damage caused by strict Covid-19 policies to a wobbly real-estate market and even Xi’s coziness with Putin. The dollar’s advance means global pain, and based on its current trajectory, the world may be in for a whole lot more [discomfort](. The risk is of a self-reinforcing feedback loop given that the vast majority of cross-border trade is still denominated in dollars, and a stronger US currency has historically translated into a broad hit to the world economy. Abrasive debate | The candidates to replace Boris Johnson as UK prime minister [attacked]( each other over economic policy, with former Chancellor of the Exchequer Rishi Sunak accusing his rivals of “socialism” and facing criticism for “choking off growth” by raising the tax burden. Conservative MPs will eliminate one of the five contenders in another round of voting today. - Candidate Liz Truss cited the Bank of Japan’s inflation mandate as a potential model for the Bank of England, drawing [derision]( from economists who said it ignored the BoJ’s failed efforts to mediate price growth and its struggle with deflation. Best of Bloomberg Opinion - [Draghi’s Left His Mark Even If Coalition Falls: Rachel Sanderson]( - [Democrats Are Scapegoating Biden for Their Own Misjudgment: Ramesh Ponnuru]([Â]( - [Tunisia Once Again Is a Test for Arab Democracy: Bobby Ghosh]( Long-range target | Russian Defense Minister Sergei Shoigu ordered part of his forces to “prioritize” efforts to [destroy]( Ukraine’s long-range missile and artillery systems during a visit to troops in occupied territory. The order came after Ukraine has deployed advanced US-supplied HIMARS artillery systems in recent weeks capable of striking Russian targets as far as 80 kilometers (50 miles) away. - Finance chiefs at a meeting of the Group of 20 economies lined up to [blame]( Russia for the global inflation wave and sharply deteriorating growth outlook. Explainers you can use - [The US Is Exporting Inflation, and Fed Hikes Will Make It Worse]( - [What Experts Know About ‘Long Covid’ and Who Gets It]( - [Here Are The Main Contenders to Be Sri Lanka’s Next President]( Uncertain times | As Sri Lanka elects a new head of state this week after months of public anger, Acting President Ranil Wickremesinghe today invoked [emergency]( rule across the island as he sought to quell protests. A leading contender for the top job, Wickremesinghe is so deeply unpopular with protesters that his whereabouts have been unknown since arsonists set his private home on fire this month. Bloomberg TV and Radio air Balance of Power with [David Westin]( weekdays from 12 to 1 p.m. ET, with a second hour on Bloomberg Radio from 1 to 2 p.m. ET. You can watch and listen on Bloomberg channels and online [here]( or check out prior episodes and guest clips [here](. News to Note - The House committee investigating the US Capitol assault expects to receive text [messages]( it has subpoenaed from the Secret Service by tomorrow, a panel member said. - Bulgaria’s president will give the Socialist Party a [mandate]( to form a new government in a last-ditch bid to avoid triggering a fourth election in less than two years. - Indonesia will press the G-20 as this year’s summit host to [include]( the African Union to ensure the plight and concerns of the continent would be represented in key meetings. - Former Pakistan Prime Minister Imran Khan called for early national elections after his party [swept]( by-elections in the country’s most populous state. - Mexican migrants attempting to cross into the US without adequate documentation [outnumbered]( those from Central America in the first six months of this year, a reversal after a slowdown due to the pandemic. Thanks to the 84 people who answered Friday’s quiz and congratulations to Marco Weinberg, who was the first to name Iran as the country the US says is preparing to provide Russia with hundreds of drones including some capable of carrying weapons. And finally ... Ganfeng Lithium, a producer of the material for carmakers including BMW and Tesla, is beginning work to assess battery metals projects in Xinjiang, [deepening]( links between electric vehicle supply chains and a region at the heart of human-rights allegations against China. The US and its allies have sanctioned individuals and entities with ties to Xinjiang and curbed some imports from the region over concerns about rights breaches and the alleged use of forced labor. Tesla’s Gigafactory in Shanghai. Photographer: Qilai Shen/Bloomberg Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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