Global Risk Indexes (03-01-2025)

Global 94 (+1 ▲)
MENA 98 ( —)
APAC 96 (+1 ▲)
Europe 95 (+1 ▲)
Africa 84 (-2 ▼)
AMERs 92 (+1 ▲)
Markets 96 (+1 ▲)
Markus Schmidt, Europe region analyst at Worldwise Analytica

Markus Schmidt

Analyzing Today, Anticipating Tomorrow

Europe Grapples with Hybrid Warfare, Ukraine Conflict, and Economic Uncertainty Amid Geopolitical Shifts

Hybrid warfare remains a critical threat, as Finnish authorities uncover new evidence linking the Eagle S vessel to undersea cable sabotage in the Baltic. These incidents reflect a sustained campaign targeting Europe's critical infrastructure, with significant implications for both energy and digital networks. NATO's increased presence in the region marks progress, but a lack of preemptive measures and comprehensive maritime policies leaves key assets exposed to further attacks.

The Ukraine conflict sees renewed Russian offensives, as Moscow intensifies its strikes on Ukraine's energy and industrial facilities. The use of drones, missiles, and artillery highlights Russia's continued reliance on asymmetric warfare to degrade Ukraine's infrastructure. Kyiv's retaliatory strikes on a Russian command post in Kursk and an oil depot in Smolensk demonstrate Ukraine's evolving tactical capabilities but risk further escalation along border regions.

Energy insecurity deepens in Eastern Europe, with Transdniestria experiencing severe disruptions following the cessation of Russian gas supplies. The region's industrial shutdown underscores the fragility of energy dependencies in post-Soviet spaces. Moldova's reliance on Romanian energy imports showcases a pathway for diversification, but sustained investment in renewables and infrastructure will be essential to ensure long-term resilience against geopolitical shocks.

Economic uncertainty intensifies, as European markets grapple with the potential impact of President-elect Donald Trump's tariff policies. Proposed measures, including a 10% blanket tariff on imports, threaten to exacerbate inflationary pressures and weaken European exports, particularly in industrial sectors like automotive and machinery. The EU must prioritize economic diversification and strengthen internal market resilience to mitigate these external risks.

Political instability continues to challenge regional stability, with Montenegro reeling from its second mass shooting in three years. The tragedy, compounded by systemic governance failures and widespread illicit weapon ownership, underscores the need for comprehensive reforms in the Western Balkans. Meanwhile, French and German political divisions further strain EU leadership at a time of heightened geopolitical uncertainty.

Geopolitical tensions extend globally, with Ukrainian President Volodymyr Zelenskiy urging decisive U.S. action under Trump's administration to counter Russian aggression. Zelenskiy's emphasis on NATO guarantees and security partnerships reflects Ukraine's strategic priorities but also highlights the fragile dynamics of transatlantic unity amidst changing U.S. foreign policy directions.

In conclusion, Europe faces a precarious geopolitical landscape, marked by hybrid threats, energy and economic vulnerabilities, and the ongoing intensification of the Ukraine conflict. Strategic cohesion within the EU, enhanced transatlantic cooperation, and investments in infrastructure and governance reforms are critical to mitigating these risks and navigating this complex environment effectively.

Geopolitical Risk Assessment for the Europe
(03-01-2025)

Europe continues to face high geopolitical risks, with escalating hybrid threats, intensifying conflict in Ukraine, and economic pressures compounded by global uncertainties. Political instability, energy insecurity, and the broader implications of shifting U.S. policies under the incoming Trump administration highlight the need for cohesive strategies and transatlantic unity.

Geopolitical Risk Index

Developments to Follow for the Europe (See All Global)

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