The EU strikes back. The European Commission has rejected Italy’s budget proposal, telling Rome to submit a new one in three weeks. If Italy refuses to make the necessary changes – something the government said it would not do – the EU would open an excessive deficit procedure that could result in sanctions against Rome by next year. A lot can happen between now and then, but the fact remains that the European Commission has done something it has never done before: It has rejected a budget of a member state, and not just any member state, but the third-largest economy on the Continent.

Turkey admonishes Saudi Arabia. Turkish President Recep Tayyip Erdogan gave a fiery speech at a meeting for his ruling Justice and Development Party, or AKP, during which he demanded that those suspected of killing Jamal Khashoggi be tried in Turkey. Not once did he mention Crown Prince Mohammed bin Salman by name, though he expressed confidence in King Salman. Turkey is attempting to parlay the international outcry against Saudi Arabia into a more prominent leadership role. It is in this context that we should interpret Ankara’s efforts to strengthen political and military ties with Qatar and Kuwait and its courtship of other potential allies. Erdogan’s speech distracted from a less encouraging political development at home. The chairman of the Nationalist Movement Party said he would withdraw from his alliance with the AKP in Turkey’s upcoming local elections, though he said their parties would remain aligned at the national level. This is an important clarification for the AKP, which doesn’t have enough seats in parliament for a majority.

Israel and Lebanon. Israel is concerned with Hezbollah’s acquisition of precision-guided missile technology. Israeli Prime Minister Benjamin Netanyahu first addressed the issue during a speech at the U.N. General Assembly last month, saying there were factories in Lebanon in which Hezbollah was outfitting unguided rockets with GPS components from Iran. More recently, a prominent former Israeli air force general and intelligence chief told Ynet news agency that Iran moved the production of these munitions from Syria to Lebanon after Israel struck Iranian targets in Syria in May, assuming that Israel would not attack Lebanon as it had Syria. Israel will now reconsider how it responds to Lebanon at an upcoming Security Cabinet meeting, according to the official. We first identified the potential for conflict here in May, and though it’s premature to say conflict is imminent, this is precisely the kind of thing that would precipitate it.

Domestic politics are getting in the way of U.S. interests in Central America. A caravan of some 7,200 migrants, according to U.N. estimates, reached Mexico on Oct. 19 from Honduras, Guatemala and El Salvador. Mexican newspaper Reforma reported that “thousands” managed to breach the border by crossing the Suchiate River on makeshift rafts. Though Mexican President Enrique Pena Nieto warned that those entering his country illegally would have trouble reaching the United States or staying in Mexico, his government has struggled to enforce immigration laws. U.S. President Donald Trump, meanwhile, wasted no time in responding, tweeting that his administration would stop aid to Guatemala, Honduras and El Salvador in return. (Washington already has significantly reduced its assistance to Central American countries this year.) Occurring just two weeks before U.S. midterm elections, the arrival of the latest caravan – the second of its kind to get to Mexico this year – is poorly timed. The current administration has made curbing immigration a top priority, but if it neglects its relationship with Central America, it could create a power vacuum in the strategic region. Earlier this month, U.S. Vice President Mike Pence issued a warning to Panama and other countries in Central America against deepening their ties with China.

U.S. allies doubt Washington’s trade policy. Japan’s government released a report downgrading its views on the short-term prospects for Japanese exports, pointing to trade friction affecting the global economy. (Trade will likely be one of the few issues on which Prime Minister Shinzo Abe finds common ground with the Chinese government when he visits China later this week, though it is a pretty big one.) Meanwhile, the Australian Financial Review reported that Australia was growing “increasingly frustrated” with the Trump administration for its lack of detail about U.S. interests in global trade and in reforming the World Trade Organization. The report said Australia’s trade minister had traveled to Canada on Monday to hold talks on possible WTO changes with officials from that country, as well as from Mexico, Singapore, Brazil, Japan, the European Union and New Zealand. From there, he will head to Washington to brief the U.S. trade representative. The main disconnect, however, seems to be that traditional U.S. allies want to reform the WTO, while the United States itself isn’t sure reform is possible.

Honorable Mentions

  • The U.S. Navy sailed a guided-missile destroyer and a guided-missile cruiser through the Taiwan Strait.
  • Pakistan’s prime minister told a reporter the country was “desperate” for Saudi loans. Without loans, Pakistan will not have enough foreign exchange reserves to service debts or pay for imports within 3 months, he said.
  • A Japanese envoy said he was optimistic that Japan and India would successfully conclude negotiations on a military logistics pact soon.
  • A meeting between Washington’s national security adviser and Moscow’s security council secretary was described by the Kremlin as “constructive and business-like” – surprising considering recent U.S. announcements that it intends to withdraw from the Intermediate-Range Nuclear Forces Treaty.
  • The CIA director is in Turkey reportedly to aid in the investigation of the murder of Jamal Khashoggi.