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Why Rishi Sunak?

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Rishi Sunak of the Conservative Party has become the new leader of the UK after the end of Liz Truss’s brief 49-day prime ministerial term. Sunak has become the new prime minister without even needing British citizens’ votes; following the resignation of Boris Johnson, together with Liz Truss, he was one of the new candidates for prime minister but had lost the race to his predecessor.

Brought down by Truss and Sunak, Boris Johnson’s understanding of the economy during and after the Covid crisis was somewhat “heterodox” and “populist”: Contrary to the general downsizing trend in western countries, Johnson had prioritized economic growth and low taxes and declared that he favored measures to pump demand. In fact, Johnson had signaled that he could implement state-led fiscal policies that were not well received by the mainstream.

Boris Johnson took office after the Brexit process, when Britain left the EU, and acted to bring his country back on the world stage as a strong player. When Covid was added to the great recession that plagued capitalist economies, Johnson’s “unstable” actions lead to his downfall. Johnson, who wanted to pursue a looser monetary policy, was thought not to have a coherent and comprehensive economic policy towards the Bank of England’s and the finance’s “orthodox” understanding.

And that’s when Liz Truss became Johnson’s successor. In her debate with Sunak, she also talked about economic growth and the reduction of taxes. She also tried to implement this plan: a $50 billion tax deduction package came into effect to be compensated by borrowing, but the response of the “markets” was harsh. Sterling has declined to unprecedented levels, panicked investors have sold $500 million in assets, and the real estate industry is on the brink. The Bank of England launched an emergency bond-buying program to prevent pension funds from going bankrupt, and the IMF criticized Truss and urged her to reconsider the program.

Perhaps the sign of the resignation came from her ally on the other side of the Atlantic: on October 16, US President Joe Biden called Liz Truss’s tax package a “mistake”. Liz Truss had already begun her U-turn and fired finance minister Kwasi Kwarteng, but it was too late.

Britain’s stalemate

We must accept that Sunak “warned” Truss in a way. During the debate, he said that Truss’s promises of tax cuts, borrowing and economic growth were unrealistic and argued that these policies would not work in an inflationary environment: Raising borrowing to historic and dangerous levels would mean pouring gasoline over the fire.

Speaking to the Financial Times before Truss’s resignation, he said the new prime minister and the new government’s overriding priority was to control inflation. He explains that Truss’ unfunded debts will exacerbate the situation and fuel inflation, and calls out directly to her, “Liz, we have to be honest. Borrowing your way out of inflation isn’t a plan, it’s a fairytale.”

Thus, ex-Goldman Sachs executive and parliament’s richest deputy, Rishi Sunak, emerged as a heartfelt supporter of monetary policies in developed capitalist countries: focusing on fighting inflation, cutting spending, raising interest rates, tight monetary policy. The new prime minister says he supports the Bank of England’s “independence” but promises tax cuts only after inflation is controlled.

But the dilemma persists. Britain went into recession as of October, according to polls published by Financial Times. Interest rate increases and monetary tightening have not been able to reduce inflation fueled by rising energy costs due to the Ukraine-Russia war and sanctions imposed on Russia. Sunak’s plan to cut expenditures seems to trigger the social crisis even more, given the increasing number of people in need of help in society. Besides, when he was the Ministry of Finance between 2020 and 2022, Sunak brought in the highest taxes Britain had seen since the 1950s. Again, even though he preaches “discipline”, Sunak promises higher public expenditures.

There is no jolt in the foreign policy line

Sunak was a supporter of Brexit policy, but there are those in his party who think he has too much sympathy for Brussels. The debate on the Northern Ireland Protocol (NIP) will also be a test for Sunak in this sense. NIP kept Northern Ireland within the EU’s integrated market for goods; it left it loose on its border with the Republic of Ireland and subjected it to additional controls in trade with the rest of Britain. NIP, signed by Boris Johnson in 2020, is criticized by Sunak, but Sunak believes a more conciliatory language is needed, unlike the hardcore Brexiters in his party.

Rishi Sunak, on the other hand, wants to tighten border controls, especially on the issue of immigrants, and to get rid of the European Court of Human Rights (ECHR) “obstacle.” Arguing that the ECHR was exploited by “lefty ” lawyers and its designation was gradually expanding, he said that the option to leave the ECHR was also on the table. Sunak also supported the plan to send asylum seekers to Rwanda.

Stressing the “special relationship” between the United States and Britain in a phone call with Joe Biden, Sunak reiterated his support for Ukraine and said they would stand up to China. In Ukraine, the prospect of Boris Johnson’s return was welcomed, and after Truss’s resignation, the government’s official Twitter account even tweeted about Boris and quickly deleted it, but Sunak’s appointment of the ministries of defense and foreign affairs to Ben Wallace and James Cleverly, who also served in the previous cabinet, was recorded as a gesture that Ukrainian politics would remain unchanged. It was also meaningful that Sunak’s first telephone conversation as prime minister was with Ukrainian leader Volodymyr Zelenskyy. However, Sunak does not support Liz Truss’s and Ben Wallace’s promise to raise defence spending to 3% of GDP. In addition, allies of Johnson’s pushed rumors that during his polemic with Sunak, the new prime minister was less committed to the war than Johnson, and a deal would one day have to be done with Putin.

Internal tensions of the Conservatives and The Talented Mr. Sunak

On the other hand, Sunak is not settled on a solid ground within the party. Boris Johnson’s leadership was the result of contradictions within the Conservative Party (Tories). Most of the Tory MPs in parliament depend on the politics of low taxation and free market sovereignty. But on the other hand, especially representatives from the northern regions of the party demand more government spending, a larger and more interventionist state, and they are very influential within the party.

The Northern Research Group (NRG), an influential team within the party, called on Liz Truss to continue the Tories’ levelling-up policy in the 2019 election manifesto. The NRG is composed of Tories selected from regions traditionally held by the Labour Party and wants more investment in the north.

Johnson chose to manage these contradictions rather than solve them. He was both conservative and pro-free market; he had promised to increase government spending and cut taxes. His speeches in the Brexit campaign included “more prosperity, less Europe”, “more freedom, less regulation”, “more dynamism, less migration.”

Apparently, Rishi Sunak is the answer given in Britain to these contradictions and the current trends of world capitalism. The economy needs to be reorganized under titles such as “green transition” and large investments are required, and the public power needs to increase at a time when private sector investments are in the bottom due to the crisis. The distance between capital groups and the state should be shorter. In addition, the ongoing war in Europe means that the regulatory authority of the state over the society is also extended to wider areas.

All this highlights a figure like Rishi Sunak. He is the member of an Indian family, who were cooperative during the colonial period, ex-Goldman Sachs manager; wealthy; professional and self-educated child of cooperative families of former colonial countries who had migrated to the West in the 1960s and had the opportunity to get into good universities…

Europe

German officials urge fighter jet alliance with Sweden and Spain

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German Defence Ministry officials have advised Berlin to form a new fighter jet partnership with Sweden and Spain rather than join an existing UK-led consortium.

Internal ministry assessment notes obtained by Politico state that a trilateral arrangement among Germany, Sweden, and Spain represents a “more advantageous and promising” approach than joining the Global Combat Air Programme (GCAP) run by the UK, Italy, and Japan.

The proposal outlined in the document does not yet represent a final government decision, nor does it contain any indication that German Defence Minister Boris Pistorius has approved the recommendation.

The advice was drafted after Germany’s flagship project with France to build a next-generation fighter jet collapsed in June following years of industrial infighting.

Initiated in 2017 and later joined by Spain, the Future Combat Air System (FCAS) was conceived as a showcase initiative for European defence cooperation. The partnership aimed to develop an aircraft to replace Germany’s Eurofighter fleet starting in 2040.

However, the initiative foundered on disputes over operational control and workshare between France-based Dassault and Germany-based Airbus Defence and Space. Following unsuccessful rescue attempts at the political level, Berlin withdrew from the joint fighter project this year.

UK Prime Minister Andy Burnham raised the prospect of Germany joining GCAP during an 8 October meeting in Berlin with Friedrich Merz. The two leaders agreed that officials should continue discussions.

For Berlin, the choice carries implications that reach far beyond which model its air force will fly. The decision will determine who controls future military technology, which countries secure production contracts, and whether a new European partnership can avoid the frictions that dismantled FCAS.

Ministry assessment keeps distance from UK-partnered GCAP project

The ministry assessment listed several reservations regarding the GCAP project. The report argued that the existing programme focuses on operations beyond Germany’s capability requirements, whereas Berlin needs an aircraft better suited for missions over continental Europe.

The document also noted that German manufacturers would struggle to secure a significant share of development and production work within an already established partnership.

Invoking past experiences with the Eurofighter programme, which was developed in the 1990s and entered service in the early 2000s, the document took direct aim at British defence contractor BAE Systems.

The German Defence Ministry assessment accused BAE Systems of prioritizing exports over the development interests of Germany and Italy, warning that British dominance would prove incompatible with an equal partnership.

By contrast, the document stated that the military requirements of Germany, Sweden, and Spain align closely and that their starting positions are well balanced.

The assessment proposed an industrial partnership between aerospace giant Airbus and Sweden’s Saab, while recommending that the Saab-manufactured Gripen E fighter jet serve as a technological stepping stone until the new aircraft is developed.

The German Defence Ministry declined to comment on the matter. A separate ministry note, however, recorded British efforts to integrate Germany into GCAP as an observer or participant, asking German officials to examine potential industrial roles and military requirements.

An Airbus spokesperson said the company was “generally open to cooperation”, provided that German and Spanish industry secured a “substantial and equal role” across development, production, and operational phases.

“Purely political decisions without an industrial foundation remain insufficient,” the spokesperson said, urging authorities in Berlin and Madrid to clarify the path forward swiftly.

In an interview published in Handelsblatt on Monday, Airbus defence chief Michael Schollhorn pointed to ties with Saab, noting that the two companies have always worked well together.

A Saab spokesperson also indicated that the company is receptive to broad defence cooperation, including in fighter aircraft.

Emphasizing that large-scale collaborative projects are handled at the political level and that participation decisions rest with the respective governments, the spokesperson said: “All questions regarding potential Swedish participation should be directed to the Swedish government. Saab stands ready, as always, to support Sweden’s future fighter aircraft requirements.”

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EU reopens debate on naming envoy for Ukraine talks with Putin

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The European Union has returned to the idea of appointing an envoy to hold talks on Ukraine with Russian President Vladimir Putin.

According to sources familiar with the matter who spoke to Politico, this search gained fresh momentum following a visit to Russia by Steve Witkoff, the US special envoy.

During his trip, Witkoff proposed to Putin that Russia, the US, and Ukraine hold trilateral talks.

European countries, meanwhile, fear that Washington could accept terms unfavourable to Kyiv in negotiations that exclude them.

Sources speaking to Politico said the names being discussed for the envoy role include European Commission President Ursula von der Leyen, European Council President António Costa, and EU High Representative for Foreign Affairs and Security Policy Kaja Kallas.

Some European diplomats believe Finnish President Alexander Stubb may be the most suitable candidate for the post.

Stubb’s good relations with Trump and Finland’s experience in dealing with Russia are cited among the factors setting him apart.

An unnamed EU diplomat described Stubb as the only European politician so far to have demonstrated senior-level leadership.

Another group of diplomats argues that Costa should lead the talks. European leaders asked Costa during last week’s EU summit in Brussels whether the time had come to speak with Putin.

Politico’s source recounted that exchange: “Costa said no, saying he would not speak to Putin right now. But if we want to play a role in the negotiations, Costa still needs to initiate dialogue with Putin.”

According to an assessment by another source, the European Council president could serve as a more neutral mediator than von der Leyen or Kallas, who are seen as overly focused on supporting Ukraine.

“Three or four people cannot go there with each of us speaking on behalf of the European Union,” one of the sources told the publication. “Ultimately, the choice of who represents the EU must be based on maximum efficiency, not on a personal power struggle or someone’s narcissistic ambitions.”

Politico previously reported in January that the EU was considering appointing a special representative for Ukraine negotiations. At the time, the initiative drew support from several European leaders, including French President Emmanuel Macron and Italian Prime Minister Giorgia Meloni.

Putin said he was ready to negotiate with European countries, but asserted that Europe had “no peace agenda” and stood “on the side of war”.

The Russian leader also named former German chancellor Gerhard Schröder as Moscow’s preferred negotiator from Europe.

Kallas ruled out such an appointment, noting that Schröder was “a lobbyist for Russian state companies” and would sit “on both sides of the negotiating table”.

Stubb details obstacles to talks and Oslo diplomatic drive

Finnish President Alexander Stubb said the principal obstacle to ending the war between Russia and Ukraine was the territorial issue.

Stubb took part in talks in Oslo with US envoy Steve Witkoff, who subsequently travelled to Saint Petersburg to meet Vladimir Putin.

As reported by the newspaper Helsingin Sanomat, Stubb stated that advancing the peace process required either bilateral talks between Russia and Ukraine or trilateral negotiations involving the US.

The Finnish president listed the other major items to be addressed within a settlement as US security guarantees for Ukraine and the construction of a new European security architecture after the war ends.

Without stating it outright, Stubb implied that the core issue within this framework was Ukraine’s NATO membership. The Finnish leader pointed to monitoring the ceasefire, establishing the line of contact, ensuring energy and food security, and exchanging prisoners as practical tasks.

Stubb also detailed the talks held in Oslo on 20 October, which included Witkoff, Ukrainian President Volodymyr Zelenskyy, and Norwegian Prime Minister Jonas Gahr Støre.

The discussions, which spanned approximately eight hours across various formats, had three objectives: to lower tensions in public discourse, to convey European and Ukrainian proposals to the US envoy before his visit to Russia, and to determine the next steps toward a peaceful settlement. Stubb announced that these goals had been achieved.

Moscow ready to resume trilateral talks in November

Witkoff met Putin in Saint Petersburg on Wednesday.

Following the meeting, Russian presidential aide Yuriy Ushakov announced that Moscow was prepared to resume trilateral negotiations with the US and Ukraine during the first half of November.

Ushakov also said that the EU and NATO had begun to “take a more serious approach” to Kremlin proposals on Ukraine, adding that “matters” were moving toward an end to the conflict.

Witkoff described the meeting as “constructive”.

Sources told Bloomberg in September that Putin continued to insist the Donetsk region must come fully under Russian control, expressing confidence that the territory would be captured within the next six months.

Putin previously set conditions for ending the war, demanding that Ukraine abandon plans to join NATO, maintain a neutral and non-nuclear status, and that anti-Russian sanctions be lifted.

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Trump midterms calculus halts Israeli strike plan against Iran

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A comprehensive military operation planned by the Israeli military for 10 October did not take place because US President Donald Trump chose to avoid a broad conflict before the 3 November congressional midterm elections.

Preparations had been made on the orders of Prime Minister Benjamin Netanyahu for an aerial bombardment meant to last several days, according to a report by the Financial Times citing sources familiar with the matter.

The list of targets included nuclear facilities and locations associated with the Iranian leadership, along with power stations and other civilian infrastructure sites.

The planned strikes were projected to exceed the joint operation launched by the US and Israel in February in terms of intensity.

White House Deputy Press Secretary Anna Kelly told the newspaper: “The United States is not going to strike Iran at any point before the midterms.”

Kelly argued that the administration in Tehran was in distress both economically and militarily, adding that the blockade imposed on Iranian ports and US efforts to secure oil shipments through the Strait of Hormuz were producing results.

Speaking to the newspaper, one source addressed the possibility of strikes resuming in the coming weeks, saying: “There’s either going to be a deal or a strike.”

The same source reported that Washington aims for a comprehensive settlement that resolves the conflict over both the Strait of Hormuz and the nuclear programme, although it remained unclear whether the US would have participated directly in the cancelled operation.

Another source said the preparations for the operation might have served as leverage to pressure Tehran in negotiations, adding that the final decision on any new military step rests with the US president.

Hegseth reviews updated target list in Israel

An Israeli official said US Secretary of War Pete Hegseth visited Israel on 19 October to meet with Netanyahu and senior representatives.

Another source stated that the Israeli side presented an updated target list to its American counterparts, compiled with fresh intelligence and incorporating civilian infrastructure sites that had not been struck earlier this year.

The Pentagon did not respond to questions regarding the meetings, while Netanyahu’s office and the Israeli military declined to comment.

Despite the postponement of the operation, Trump and Netanyahu continued to issue military warnings to Iran in public.

In a video released on 19 October, Netanyahu addressed Trump, saying: “Donald, you said we need to finish this, and we will finish it together.” Speaking on speakerphone, Trump responded: “You’re a great warrior, and we’re going to prove it very soon.”

These engagements between the leaders coincide with critical election cycles in both countries.

Parliamentary elections in Israel are scheduled for 27 October, one week before the vote in the US.

Most public opinion polls in the country show the opposition bloc holding a narrow lead over Netanyahu’s coalition, though neither side commands a clear majority.

Axios, a US-based news outlet, previously reported that the Pentagon instructed military planners to finalize strike plans against Iran, though the directive specified no date and Trump had not reached a final decision.

On 15 October, CNN reported on plans to use the GBU-43/B munition, known as the “mother of all bombs”, against Iranian nuclear facilities, with US officials who spoke to the broadcaster expressing scepticism about the weapon’s ability to destroy deep bunkers.

While Tehran announced that it remains open to a diplomatic solution, it declared that any potential operation would draw a fierce response.

Iranian Foreign Minister Abbas Araghchi stressed that if its adversaries chose military conflict, the response would be “much harsher than before”.

Following the joint operation launched by the US and Israel on 28 February, Iran retaliated by striking targets across the region and restricting maritime passage through the Strait of Hormuz.

Although the parties reached an agreement in June covering a ceasefire and negotiations to lift the blockade in the strait, reciprocal strikes between the US and Iran have not ceased.

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