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Watch List: April 11, 2018

Threats of retaliation in Syria, signs of a slowdown in Europe

|April 11, 2018

The items listed below represent potential emerging issues that our analysts are tracking. These can be long term or short term, but will be updated daily. If an item on our Watch List becomes critical, we will email you a full analysis explaining its significance.

Each Saturday, we will follow up our daily Watch List for each week with our conclusions on these issues.

Syria: A senior Iranian official warned that Iran will respond to the Israeli airstrike on an air base in Syria over the weekend. The Israeli military is on high alert and concerned about possible retaliation by Hezbollah. Meanwhile, Saudi Crown Prince Mohammed bin Salman said Riyadh may participate in a joint military response to a chemical weapons attack in a town near the Syrian capital. Turkey has asked both Russia and the United States to refrain from taking military action. We will be tracking responses from all major players in the region.

Europe: The eurozone is showing signs of an economic slowdown. In Germany, retail sales have declined in six of the past eight months, industrial production fell by 1.6 percent in February and construction spending is down. Meanwhile, a strike by public sector workers is affecting German airline Lufthansa, which has had to cancel hundreds of flights. A recession or economic decline in Germany would have implications for the whole continent. Are there any other labor protests in the works? What happened to the auto workers who were on strike at the beginning of the year?

Iran, Russia, Turkey: Iran, Russia and Turkey are all experiencing significant declines in the value of their currencies, with some hitting record lows in relation to the U.S. dollar. What is causing these currencies to depreciate? Is there a common denominator between the three countries?

Czech Republic: The Czech president has urged the prime minister to once again try to form a coalition with the Communist Party of Bohemia and Moravia and the euroskeptic Freedom and Direct Democracy party following the collapse of coalition talks with the Social Democrats last week. The prime minister has not won a confidence vote in parliament since he took office last October. Our forecast expects nationalism to grow throughout Europe. Are we seeing the start of an anti-EU government in the Czech Republic? Has the EU issued any comments about the status of the Czech government recently?

Belarus, Russia: Belarus and Russia have started joint tactical military exercises near the city of Brest along the Polish border. Exercises will focus on counter-sabotage operations and operations against illegal paramilitary units. How far in advance were these exercises scheduled? Has there been any response from Poland or NATO?

Latin America: On April 10, authorities in Ecuador and Mexico received two unusual bomb threats. One targeted Ecuador’s Foreign Ministry headquarters and the other targeted a flight leaving Mexico City’s international airport headed to Bogota. No explosive devices were found in either case. Bomb threats are uncommon in this part of the world; that there were two in one day is very unusual. We need to track down any information about who may have issued the threats, if any more threats have been made and if there are links between the two incidents.

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