RIDDLE: Sanctions and the Eurasian Economic Union
Belarus President Lukashenko wins re-election in a landslide, to no one’s surprise
Belarus' Lukashenko is a shoo-in for his seventh election as president
Lukashenko mulls building a second nuclear power plant
Russia to unveil new Kalashnikov in Abu Dhabi
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Russian military withdraws from Syria amid tensions with Damascus regime
Germany’s Russian LNG imports surge over 500% in 2024, via other countries
Ukraine's stored gas falls to critically low levels, imports urgently needed
Brazil's President Lula and Putin hold talks on Ukraine war and BRICS
ING: EU considering Russian aluminium ban in new sanctions push
Lack of megadeals drags down M&A volume in Emerging Europe
Turkey’s role in European security on agenda as top diplomats of Ankara, EU meet
COMMENT: Europe needs to start the fightback against Trump now
Analysts expect ‘perfect storm’ of political risks in 2025
Central and Eastern European banks defy expectations with robust 2024 earnings, says RBI
Czech National Bank to become the first European central bank to add Bitcoin to its reserves
Slovakia's political crisis deepens, PM Fico accuses Czech politicians and media of meddling with Slovak internal affairs
Hungary’s economy emerges from recession in Q4 but 2024 growth disappoints
Hungary to enhance cooperation with UAE in defence and advanced technologies
Hungarian PM arrives in UAE amid controversy surrounding flagship real estate development project
Solar generation tops coal for first time in EU in 2024
Polish retail sales disappoint in December
Protests against Fico’s pro-Kremlin turn intensify across Slovakia
President Pellegrini calls situation in Slovakia “serious” in wake of country-wide protests, PM Fico coup plot claims
Slovenian president “very worried” about far-right FPÖ-led government in Austria
Albania plans Vatican-style state for Bektashi order in Tirana
Albania's PM signals possible shift on TikTok ban
OUTLOOK Southeastern Europe 2025
Shopping boycotts spread across the Balkans
BALKAN BLOG: Polluted Balkan capitals choke on winter smog
Bulgaria’s new government gives up on January 2026 eurozone entry
Bulgaria’s ruling coalition rejects central bank law changes putting eurozone entry at risk
Croatian shops nearly empty as boycott gets underway
Croatian robot boat to tackle microplastics in the Adriatic
Analysts and diplomats accuse Serbia of hybrid warfare ahead of Kosovo's general election
Sanctions stepped up in the Western Balkans, but with mixed results
EU gives Moldova €30mn as short-term fix to energy crisis and promises longer-term plan
Ukraine offers coal and experts to settle Transnistria’s energy crisis without Russia
Expected settlement of energy crisis in Transnistria may have a security cost
Protesters in Montenegro threaten civil disobedience
Owner of North Macedonia’s Gley streaming platform to launch IPO
Romania’s public debt reaches 54.3% of GDP at end-November
Romanian energy minister slams EU’s "green shock therapy"
Iconic Romanian ancient artefacts stolen from Dutch museum
Serbian students march from Belgrade to Novi Sad
Serbian President Vucic mulls snap general election
Musk urged to knock Turkish drones out of global market
Sweden’s Aonic invests $10mn in Turkish game developer Mega Fortuna
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Central Asia emerges as new e-commerce hub
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Russia and Armenia seek to ease strained relations
CAUCASUS BLOG: Is it the end of the honeymoon between Azerbaijan and Russia?
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European Council suspends visa-free regime for Georgian officials and diplomats
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OUTLOOK Small Stans & Mongolia 2025
Angry Mongolians take to streets in public backlash over taxes and smog
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Turkmen loo users warned state newspapers not “read and wipe” material
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Rain, rain go away
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EM winners and losers from the global green transformation
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Trump calls on OPEC to ramp up oil supply
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The situation in the Middle East rapidly destabilised in the last week by a slew of bombings, missile and counter-missile strikes that brought the whole region much closer to a region-wide war.
In the latest attack, Israel killed four Iranian Islamic Revolutionary Guards Corps (IRGC) military officials in a missile strike on Damascus on the morning of January 20, according to reports by the Iranian and Syrian media.
The situation starts to run out of control; several leading countries, including China, Russia, Japan, and South Africa, have offered to mediate to restore peace before a wider regional conflict breaks out.
The January 20 missile strike was the latest attack in retaliation for the shocking attack on Israel by Hamas on October 7 that left some 1,200 Israelis dead and provoked the brutal bombing of the Gaza strip that has killed 24,000 Palestinians, according to the latest count, over half of them women and children and already refugees from other parts of Occupied Palestine.
With both sides persistently outraged, the fighting has already spiralled into the wider region. In the last week, there have been attacks in the following countries related to the rapidly escalating tensions:
· Pakistan and Iran have both fired missiles at each other killing dozens;
· Yemen's Houthi government continue attacking Red Sea and Indian Ocean shipping,
· International shipping traffic to an almost standstill with insurance premiums skyrocketing;
· Iran fired missiles at Syria, targeting Turkish-backed rebels;
· Iran fired missiles at Iraq's Kurdistan region killing an alleged Israeli agent;
· Iraqi militants targeted US troops in Iraqi Kurdistan with drones;
· Iraqi militants targeting occupying US troops and oil convoys in Eastern Syria;
· Lebanon’s Hezbollah fired missiles at Israel, forcing communities in the north to evacuate;
· US and the UK fired missiles at Yemen's Houthis;
· Turkey fired missiles in Syria and Iraq targeting Kurds;
· Jordan conducted attacks inside Syria, claiming to stop "smuggling".
Multiple attacks destabilise the Middle East map
Bombings
Following the Hamas attack on Israel and several weeks of bombing of Gaza by Israel, tensions were ratcheted up to the next level by a series of retaliations.
Beirut: the senior Hamas official Saleh al-Arouri was killed in an Israeli drone strike on Beirut’s southern suburb of Dahiyeh on January 2. Al-Arouri was a senior official in Hamas’s politburo and was known to be deeply involved in its military affairs. The Lebanese government protested, what they claimed was an unprovoked attack on its sovereign territory.
Israel: Lebanese armed group Hezbollah fired a retaliatory barrage of 62 missiles back at Israel on January 6, targeting a vital Israeli military post as a “preliminary response” to the killing of Saleh al-Arouri in Beirut the same week, Al Jazeera reported.
Kerman: Almost 100 people were killed and 171 injured in twin bombings during a memorial ceremony in Kerman, Iran, commemorating the fourth anniversary of the US killing of Qasem Soleimani, a top Iranian military commander, on January 3. ISIS later claimed responsibility for the attack. Tehran has vowed a severe response following the blasts.
Soleimani, head of Iran's elite Quds Force, was killed in a 2020 US drone strike in Baghdad, arguably the Islamic Republic’s second most powerful figure after Supreme Leader Ayatollah Ali Khamenei that threatened to trigger a regional war at the time.
Baghdad: The US has assassinated Mushtaq Taleb al-Saidi, one of the leaders of Iraq’s Popular Mobilization Forces (PMF), a network of militias backed by Iran, in an attack that could further destabilise the Middle East following the massive bomb attack inside Iran on January 4. Al-Saidi, also known as Abu Taqwa, was killed by a drone as his car entered the garage of the al-Nujaba militia's headquarters, resulting in two deaths and five injuries.
The US military admitted carrying out the strike in Baghdad against an Iraqi militia leader it blames for attacks against US forces in the country, a US official told Reuters. Since the Israel-Hamas war commenced on October 7, Iraqi groups have hit US troops and CIA black sites in Kurdistan more than 100 times in response to Israel’s invasion of Gaza.
Missile attacks
Houthis in the Red Sea: shortly after the start of the bombing of the Gaza Strip by Israel, the Houthis started firing drones and missiles towards Israel, most of which were intercepted.
On 19 November, the Houthis hijacked a commercial ship in the Red Sea and have since attacked dozens of others with drones, missiles and speed boats.
The Houthis control Yemen and oppose the Israeli actions in Gaza.
The US launched "Operation Prosperity Guardian" in December to try and keep the Red Sea shipping channel open, which accounts for about 10% of global trade. ING recently warned in a note that closing the Red Sea to traffic could have serious knock-on effects on the world’s commodity markets.
US, UK and Yemen: in response to the Houthi attacks in the Red Sea, the US and UK started a series of missile and bombing strikes against Houthi targets in Yemen on January 12.
The Houthis have been a pivotal force in the region's dynamics for years and are also in conflict with the Kingdom of Saudi Arabia (KSA) in a 13-year-long war which ended in a stalemate despite US weaponry and assistance being given to the House of Saud.
Iran, Syria and Iraq: Iran’s Islamic Revolutionary Guard Corps (IRGC) fired missiles at what it claimed were Israeli “spy headquarters” in the capital of the breakaway government of Iraq’s Kurdish region of Erbil on January 15. It also hit targets allegedly linked to ISIS in northern Syria, saying it was defending its security and countering terrorism.
At least eight explosions were heard in Erbil killing four people and six were wounded, the regional security council said, reports Al Jazeera. The Iraqi government condemned Iran’s “aggression” calling it a violation of the country’s sovereignty and the security of its people, according to a statement from the Ministry of Foreign Affairs.
Turkey and Syria: Nine Turkish soldiers were killed in clashes with Kurdistan Workers Party (PKK) fighters in northern Iraq on January 15 and Ankara responded the next day with air strikes and military operations in both northern Iraq and northern Syria.
Turkey hit Kurdish fighters in both regions overnight on January 16, destroying 23 targets, the Turkish Ministry of National Defence said the same day. The operation extends a recent escalation in violence across Turkey’s southern border, as regional tension spills over into Turkey’s backyard.
Pakistan and Iran: Relations between Tehran and Islamabad had nosedived after Iran’s Islamic Revolutionary Guards Corps (IRGC) destroyed two bases of the separatist Sunni group Jaish ul-Adl in Pakistan on January 16 using missiles and drones.
Pakistan launched a retaliatory strike against Iran on January 18, following an Iranian attack on Pakistani soil. Islamabad’s air force launched retaliatory airstrikes on two alleged militant positions inside Iran for the first time, days after an Iranian airstrike on likely militant sites inside Pakistan. The two neighbours have never bombed each other before.
Lebanon and Israel: Hezbollah resumed its missile attacks on Israel on January 16, firing an anti-tank missile which hit a home in northern Israel, killing two civilians and renewing concerns about the risk of a second front erupting in the Israel-Hamas war.
While the Iran-backed Hezbollah has been a long-standing enemy of Israel’s, experts say its leadership is reluctant to engage in a full scale war with Israel, which enjoys the full backing of the US. Nevertheless, tensions between the two continue to escalate.
A top Hezbollah official warned Israel would "receive a real slap in the face" if it expanded the conflict along the Lebanon-Israel border, on January 19, France24 reports. Any restoration of stability on the border is contingent on "the end of the aggression in Gaza", he added.
Jordan and Syria: Jordan launched a missile strike against what it claims were dozens of drug smugglers from Syria linked to pro-Iranian militias, who crossed its border on January 18. The army blew up a vehicle laden with explosives as it resisted the biggest armed cross-border operation to smuggle weapons and drugs in recent years. Reuters reported.
Jordan said the smugglers were armed with rocket launchers, anti-personnel mines and explosives, according to state broadcaster al Mamlaka. The incident was the latest of several major incursions since the start of January that has left one Jordanian soldier and at least a dozen smugglers dead.
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