Video Transcript: This will be a stressful few months for many parts of the world as Europe continues to fragment, China struggles to control its economy and the United States tries to manage these flare-ups from the resulting global disorder from afar. Here is a quick preview of Stratfor's second quarter forecast. Germany is getting cornered. The German government must maintain a very difficult balance between demonstrating to its own taxpayers that it will apply a firm hand in managing bailouts in the periphery and at the same time being careful enough to avoid a rupture with France that would unravel the foundation of the European Union. With German elections six months away, this noose will tighten and France's difficult in managing rising unemployment at home will stress the Franco-German relationship. Though Paris and Berlin will continue working together, anti-German sentiment will rise in the periphery and create more political space for radical, anti-establishment parties to challenge the traditional elite. We'll also be watching Russia with an extra close eye this quarter as it quietly seeks out economic deals with distressed European countries in strategic sectors while continuing purges within the Kremlin. As European demand continues to slump, China will try to buffer against the potential for widespread defaults after a major burst in informal lending activity earlier in the year. This is where Beijing's struggle to rebalance its relationship with local governments will come back in focus as it tries to implement additional controls in how credit is obtained and used at the local level. The center will have to absorb more debt in trying to enforce these measures overall, but don't expect clarity this quarter from Beijing's newly-inducted bureaucrats when it comes to longer-term economic policy to address these fundamental imbalances. As Syrian rebels continue to make gains on the northern, eastern and southern approaches to Damascus, supply lines emanating from Lebanon will increase in importance and thus contribute to already growing tensions between Hezbollah and Lebanese Sunnis. Turkey will focus its attention at home this quarter as it tries to uphold a cease-fire with the Kurdistan Workers Party and bargain over constitutional reforms, but it's also more vulnerable to spoiler attacks from bothIran and Syria. Egypt will meanwhile scrape by this quarter, with the military and the Muslim Brotherhood facing little choice but to work together in trying to prevent a security vacuum from growing in the country. Now cartel violence will continue to make the headlines in Mexico, but far more significant is the political debate in play in Mexico City over a number of significant reforms. This quarter, the political bargaining that will lead the liberalization of the telecom and media industries will provide cautious optimism for further reforms in the financial sector, mining, immigration and, further down the line, in the energy sector. Farther south, don't expect any big changes out of Venezuela this quarter. The likely victor of the upcoming elections, Nicolas Maduro, has enough political backing to avert a power struggle and calm investors on the stability of the transition overall, but his need to adhere to Chavez's populist agenda for credibility at home will deepen Venezuela's economic morass. Make sure to visit Stratfor.com for a much more detailed overview of what we expect to transpire in the coming quarter.
Get unlimited access with a Stratfor Worldview Subscription.