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New dividing line

In the Covid-19 era, housing is becoming a political minefield.

Just ask Swedish Prime Minister Stefan Lofven, who lost a confidence vote in parliament today. While there are several reasons behind the crisis in Stockholm, the trigger was the government's proposed changes to the rental housing market.

Governments at local and national level the world over are struggling to respond to the challenge of the inexorable rise in the cost of renting or owning a home. And it's getting worse, as pandemic stimulus drives property prices to fresh records worldwide.

Niraj Shah of Bloomberg Economics has crunched the numbers to come up with a table of countries at risk of real-estate bubbles. Sweden is No. 3, after New Zealand and Canada. The U.K. is No. 5 and the U.S. in seventh place.

Housing bubbles are indicators of trouble ahead. Sub-prime mortgages were at the root of the 2008 crisis that forced politicians to take extraordinary measures to shore up the global financial system.

This time, politics may be first to feel the blowback. Already, Berlin has witnessed rent protests, while Colombia (No. 16 on Shah's list) has seen mass unrest over a cocktail of issues including inequality.

Particularly for millennials and the younger cohort of Gen Z, getting on the "property ladder" is increasingly out of reach. That reality makes access to housing a key dividing line in politics as traditional notions of left and right dissolve.

Certainly in Sweden, the housing crisis is likely to be top of the in-tray for whoever is the next premier. Alan Crawford

Evening sunlight illuminates residential apartment buildings in Stockholm.

Photographer: Mikael Sjoberg/Bloomberg

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Global Headlines

Dragging on | After a sixth round of negotiations in Vienna yesterday, world powers and Iran failed to revive a nuclear deal that would lift U.S. sanctions on the oil-rich Islamic Republic in exchange for it scaling back atomic activities. A day after conservative cleric Ebrahim Raisi was declared the winner of Iran's presidential election, diplomats adjourned with significant gaps remaining to mend the six-year-old accord.

Let's talk, maybe? | President Joe Biden's point man for North Korea, Sung Kim, said the U.S. is ready to talk "anytime, anywhere" with Pyongyang, giving a strong signal Washington is ready to revive disarmament negotiations. The message comes after Kim Jong Un last week said he's prepared for "both dialogue and confrontation."

China fears | Japan's reluctance to put financial pressure on Myanmar's junta shows the difficulties Biden faces in convincing U.S. allies in Asia to put real teeth behind calls to defend democracy. For Japan and India in particular, tough measures against the military only risk ceding influence to China, Philip Heijmans and Kwan Wei Kevin Tan report.

  • Next Digital plans to stop publishing Apple Daily later this week unless authorities in Hong Kong allow access to its bank accounts, the pro-democracy newspaper reported.

China's unemployment rate has steadily dropped from last year's pandemic peak, but a lack of jobs for graduates and a shortage of skilled manufacturing workers point to underlying problems in the labor market.

Likely win | Abiy Ahmed appears assured of remaining Ethiopia's prime minister after today's election, despite waging a civil war that's triggered a famine in the Tigray region and failing to contain exploding ethnic tensions in Africa's second-most populous nation, Fasika Tadesse and Simon Marks report.

A woman who fled from violence in the Tigray region prepares coffee in a classroom occupied with 25 mothers in Mekele, on June 18.

Photographer: Yasuyoshi Chiba/AFP/Getty Images

Disappointing show | President Emmanuel Macron and far-right leader Marine Le Pen performed worse than expected in the first round of France's regional election, exit polls showed, in a disappointing twist for the two main contenders in the 2022 presidential race. Well ahead of them were the traditional right, with 29% on its own, while the left-wing and Green parties together won 34%, according to an Ifop survey.

What to Watch This Week

  • Biden's plan for trillions of dollars in proposed spending and tax increases is entering a procedural and political thicket in the U.S. Congress that's likely to take at least until September to clear.

  • Protesters in Thailand plan to return to Bangkok's streets on Thursday, reviving a pro-democracy movement after a six-month lull during two waves of Covid-19 outbreaks.

  • Angela Merkel's bloc presents its election program today, with opinion polls suggesting the German chancellor's successor as party leader, Armin Laschet, may secure another term for the center-right.
  • The U.S. is preparing additional sanctions against Russia for the poisoning of opposition leader Alexey Navalny, National Security Adviser Jake Sullivan said.
  • European Union governments are set to sanction several sectors of Belarus's economy as well as 86 individuals and entities, as the bloc increases pressure on President Alexander Lukashenko.
  • The U.K. government signaled it will keep restrictions on overseas travel in place for now to control a surge in coronavirus infections and the risk of new variants of the virus taking hold.

Thanks to the more than 35 people who answered our Friday quiz and congratulations to Moe Kasem, who was the first to name Apple Inc. as the company facing renewed scrutiny in Washington over its compliance with secret Trump-era subpoenas for data on more than 100 users.

And finally ... Even with 500,000 dead from the Covid-19 outbreak, a toll second only to the U.S., Brazil's residents are spurning vaccines that they believe are substandard in favor of hard-to-find shots from Pfizer. People demand the U.S. company's inoculations at public clinics and often walk out if none are available. Some health-care centers have put up signs saying "no Pfizer shots" to save time. 

A nearly empty drive-through vaccination site offering the Sinovac vaccine at the Latin America Memorial in Sao Paulo on June 18.

Photographer: Rodrigo Capote/Bloomberg

 

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