Choppy waters hit Iberia’s Socialists

Socialism has been enduring political force in Iberian peninsula [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. With center-left parties on the decline across Europe, the Iberian peninsula has been one place where Socialists have been relatively strong. Until this week, it was Portugal’s Antonio Costa in the best position, after securing an outright majority in last year’s election. In Madrid by contrast, Pedro Sanchez has been ducking and weaving his whole premiership to patch together the support to stay in power. He looked set to be ousted by an alliance of right-wing parties in July’s vote. But a late surge was enough to secure a stalemate, even though the Socialist party came second. Now their fortunes are reversing. Costa announced his shock resignation on Tuesday after being caught up in a corruption probe relating to lithium exploration in the north of the country. President Marcelo Rebelo de Sousa is expected to announce a date for fresh elections today. Sanchez on the other hand is closing in on an [unlikely and controversial pact]( with a Catalan separatist group to claim a third term. A handful of lawmakers allied to former Catalan President Carles Puigdemont will agree to give the prime minister a majority in exchange for an amnesty that will absolve hundreds of activists, including Puigdemont, of charges relating to the illegal referendum on independence in 2017. Sanchez had ruled out an amnesty ahead of this year’s election, saying previously such a move would be unconstitutional. So the reaction to his volte-face has been furious in Madrid, with protesters clashing with police outside the Socialist party headquarters. But he has been here before. Sanchez survived the storm unleashed by his decision to pardon other separatists in 2021 and has shown that he’s happy to ride out attacks from those questioning his integrity. While Costa is out in Portugal, it appears that Sanchez will carry the Socialist banner forward in Spain. — [Ben Sills]( Sanchez speaks during an election night rally in Madrid on July 23. Photographer: Bloomberg Global Must Reads US fighters fired upon a weapons depot in Syria used by Iran’s Islamic Revolutionary Guard Corps, in [retaliation for attacks]( on American forces in Iraq and Syria, Defense Secretary Lloyd Austin said. Former US Secretary of State Hillary Clinton said both Israel and the Palestinians [need new leadership]( to have a chance of achieving a peace deal once the war in the Gaza Strip ends. If the US and China can again come together in the quest [to slash greenhouse gas emissions](, there’s hope that progress can be made at COP28 in Dubai. The two countries’ top climate negotiators held talks for five days this week to lay the groundwork for a meeting between US President Joe Biden and Chinese leader Xi Jinping later this month. But the window for success at the climate summit in December is shrinking. Italian Prime Minister Giorgia Meloni is used [to people underestimating her](. As Chiara Albanese writes, her what-you-see-is-what-you-get authenticity dovetails with a steeliness that just over a year ago catapulted her into power — a position no woman had ever held in Italy. In a country where many governments collapse after a year, few thought the far-right leader would last. Giorgia Meloni. Photographer: Alessia Pierdomenico/Bloomberg A new cohort of Russian business elite is benefiting from the void left [when international firms suddenly exited]( following President Vladimir Putin’s invasion of Ukraine. The latest wave of entrepreneurs to seize their chance have snapped up assets from the likes of McDonald’s and packaging group Ball Corp. at discounted prices after the war prompted multinationals to leave because of pressure from sanctions and their own investors. The US and Europe moved fast to choke off exports of oil, natural gas and coal from Russia after Putin invaded Ukraine. As Jonathan Tirone [explains](, however, Kremlin-controlled Rosatom continues to be the dominant source of fuel for the world’s nuclear-power stations, supplying about half of global demand for enriched uranium. He wasn’t even there, but Donald Trump’s shadow [loomed over yesterday’s debate]( among five Republicans seeking the nomination for next year’s US election. While they blamed the former president for the party’s latest electoral embarrassment, they did little to distinguish themselves from the GOP frontrunner. German Chancellor Olaf Scholz marked the 85th anniversary of the 1938 Nazi pogrom against Jews by declaring the country’s [zero tolerance for antisemitism](, while also reaching out to the nation’s roughly 5 million Muslim citizens. About 200 people may have been killed by Sudanese militias allied with the Rapid Support Forces, after the group that’s fighting for control of the nation [overran an army base]( in the western Darfur region, humanitarian officials said. Washington Dispatch Biden and United Auto Workers leader Shawn Fain will meet today in Illinois to [celebrate an accord]( between the labor union and Detroit’s Big Three automakers after a weeks-long strike that generated anxieties about possible economic fallout. The agreement comes at a crucial time both for Biden and the reviving labor movement in the US. The president lags behind his predecessor, Trump, in polls of several swing states, and the automobile industry plays a vital role in the economies of some of them. The strike put Biden’s campaign for electric vehicles on a collision course with union alliances essential to a Democratic candidate. In Illinois, he can trumpet the labor agreement and mark the planned reopening of an assembly plant in Belvidere. Fain took an enormous risk with his strategy of confronting Ford, General Motors and Stellantis with targeted strikes. He now has ambitions of luring nonunion workers at Tesla and Toyota into the UAW fold. One thing to watch today: Treasury Secretary Janet Yellen begins two days of meetings with her Chinese counterpart, Vice Premier He Lifeng, before next week’s Asia-Pacific Economic Cooperation forum in San Francisco. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 5pm ET weekdays on Bloomberg Television. Chart of the Day Hardliners in Washington are demanding that the Biden administration tighten sanctions on Iran as punishment for its support of Hamas. Tehran, they argue, has been [exporting more oil]( over recent months than it has in years. The vast majority of its barrels — well over 90% — are heading to China. And Finally Located on South America’s northernmost tip, La Guajira in Colombia has powerful trade winds that blow year round, giving it the potential to meet practically all the electricity needs of the nation of 52 million along with President Gustavo Petro’s energy transition goals. But gaining consent to build power lines across Indigenous land is a slow and unpredictable process. As Andrea Jaramillo reports, after several failed starts, companies increasingly [see now as the moment]( to tap one of the most promising places on Earth for wind energy. “Yonna,” a traditional Wayuu dance. 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