Key Takeaways From the Formation of the New Czech Government

On 15th December, President Petr Pavel formally appointed the new coalition government of Czechia, led by returning Prime Minister Andrej Babiš. The cabinet is yet to be confirmed by a vote of confidence in parliament, however under Czech law it is already eligible to govern, with the first cabinet meeting scheduled for 14th January. The appointment follows the Babiš-led ANO party’s victory in the October parliamentary election, in which ANO secured 80 of the 200 seats in the Chamber of Deputies (lower house). To secure a majority, Babiš formed a coalition with the Eurosceptic Freedom and Direct Democracy (SPD) and the right-wing populist Motorists movement.

 

The new 16-member cabinet sees ANO controlling eight ministries, including finance, interior affairs and industry and trade. The Motorists control four ministries and three were allocated to the SPD. The appointment came after Babiš resolved a conflict-of-interest issue by shifting his Agrofert business group to an independently governed trust structure.

 

A previously liberal formation which has gradually shifted toward the right in recent years, ANO’s recent promises include reducing public sector spending, lowering taxes in general (including the corporate income tax), 0% VAT on prescription drugs, improving tax collection and combatting the grey economy. The party is also focused on increasing social support for seniors and families, as well as on affordable housing and improving healthcare. Accordingly, the new government is expected to focus on cost-of-living issues, likely at the expense of fiscal discipline.

 

The coalition is likely to adopt a more Eurosceptic stance, positioning Prague closer to like-minded governments in Budapest and Bratislava. The new government is expected to be critical of the European Green Deal, the EU’s migration pact and introducing the euro. While committed to EU and NATO membership, domestic support for Ukraine will likely be scaled down. President Pavel, a staunch pro-EU/NATO advocate and ideological opponent of Babiš in many areas, is expected to serve as a key figure in foreign policy and a political counterbalance to the new ruling bloc.

Azerbaijan’s Entry Marks Strategic Addition to Central Asia’s Regional Cooperation Format

Azerbaijan has been formally admitted to the Central Asian Consultative Meetings, consequently transforming the C5 cooperation format—comprising Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan—into the C6. This strategic addition signals growing diplomatic and economic interest in Central Asia and marks a major milestone for regional cooperation. For Central Asian countries, Azerbaijan’s participation offers new opportunities for export diversification, expansion of transit geography, and reinforcement of new logistical capacities.

 

The core rationale behind this deeper cooperation exists across multiple strategic dimensions. Key among these is the enhancement of regional infrastructure and transport, particularly the Middle (Trans-Caspian) Corridor, which serves as critical freight infrastructure connecting China to Europe while circumventing Russian territory. This route enhances supply chain resilience and reduces Central Asian dependency on traditional northern routes. Azerbaijan’s role is essential due to its Caspian Sea port access. Other vital areas include the Zangezur Corridor, which will link Central Asian and Azerbaijani transport networks to Europe via Türkiye; the Trans-Caspian Digital Highway, a $50.6 million fiber-optic cable project to facilitate data transmission independent of Russian infrastructure; and the Trans-Caspian Green Energy Corridor, an integrated ecosystem for renewable energy generation and transmission. Moreover, the expanded format facilitates the development of alternative petroleum transportation systems for Central Asian states that bypass Russian infrastructure, utilizing Azerbaijan’s established energy export infrastructure like the Baku-Tbilisi-Ceyhan (BTC) pipeline.

 

While Azerbaijan’s admittance is a major milestone, Central Asia’s regional cooperation format currently has no plans to further institutionalize, with coordination set to the task of national foreign ministries. Looking ahead, Georgia, Mongolia, and Afghanistan represent plausible future expansion candidates, each offering distinct strategic rationales. At the same time, it is yet to be seen whether the platform’s membership will grow, while further expansion may also lead to the loss of its Central Asia-specific nature.

Political Crisis in Mongolia

Mongolia is facing one of its most severe political crises in decades after tension between the country’s parliament and President Ukhnaagiin Khürelsükh escalated into a constitutional standoff following parliament’s move to dismiss Prime Minister Gombojavyn Zandanshatar. The Constitutional Court later ruled the PM’s dismissal unconstitutional, deepening the power struggle between the legislative branch and executive branches. In parallel, a nationwide teachers’ strike quickly evolved into broader protests against government inefficiency and corruption.

 

The confrontation primarily involves the ruling Mongolian People’s Party (MPP) and the opposition Democratic Party (DP). The MPP, the party of both the PM and the President, is experiencing internal tension and seemingly losing its ability to function as a united front. In parallel, the formerly weakened DP is attempting to regain influence and position itself as a potential center of a new political configuration. As a result, partisan infighting has paralyzed parliamentary work, undermining public trust and deterring foreign investors.

 

At the same time, Mongolia’s economy faces mounting challenges, including high inflation, rising poverty and heavy dependence on China for exports and Russia for fuel. Falling coal prices and delays in infrastructure development have further limited economic growth. Foreign investors now view political instability as the main risk to Mongolia’s reform agenda and long-term projects. Without a political compromise and stronger governance, the country risks prolonged instability, weakening democratic institutions and delaying much-needed modernization.

 

Possible forward scenarios include de-escalation through the formation of a new government to stabilize the political and economic climate. If the situation continues to deteriorate, it will lead to a prolonged political crisis, a loss of public trust in state institutions, and a slowdown in economic reforms. Although less probable, the President may use the crisis as an opportunity to consolidate his power by creating preconditions for a managed authoritarian model.

Key Takeaways from the C5+1 Summit in Washington

On 6th November, US President Donald Trump hosted the leaders of the five Central Asian nations (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan) for the 10th annual C5+1 summit at the White House. The summit resulted in several agreements across a number of priority areas, including the business environment, trade and investment, critical materials, innovation, the digital economy, as well as trans-regional connectivity. Kazakhstan, Uzbekistan and Tajikistan also signed a number of bilateral agreements with the US (and subsequently with several US companies).

 

Central Asia’s high expectations for the latest C5+1 summit were also underlined by legislative amendments recently introduced to the US Congress to repeal the so-called Jackson-Vanik Amendment, a Cold War-era addition to the US Trade Act, which formally restricts trade with the countries of the region. The amendments are aimed at granting Central Asian countries Permanent Normal Trade Relations (PNTR) status.

 

If approved by Congress and signed by President Trump, the repeal of the amendment would provide Central Asia with simplified access to the US market and the possibility of concluding bilateral investment protection agreements. An inflow of US investment and technology into the energy, logistics, agriculture and green economy sectors is also likely to follow, while the region’s status as an equal trading partner would be strengthened.

 

While the amendment’s repeal would open a new era in bilateral economic and trade relations, the process may be selective in nature. If only selected regional economies (such as Kazakhstan and Uzbekistan) receive PNTR status, US engagement with the region would become more differentiated, and Central Asian states would compete for Washington’s attention and resources. Furthermore, the repeal may trigger a negative reaction from Russia and China, whose leaders could view this step as an attempt to weaken their influence in the region.

Moldova Forms New Government After Pro-EU Election Win

Moldova’s parliament has ratified the country’s new parliament, led by pro-EU Prime Minister Alexandru Munteanu. The formation of the new cabinet comes a month after the ruling Party of Action and Solidarity (PAS) won the parliamentary elections on 28th September, securing 50.2% of the popular vote and 55 of the 101 seats in parliament.

 

The Munteanu Government is a combination of newly appointed members and members of the previous cabinet led by Dorin Recean. Under the governance program “EU, Peace, Development,” Prime Minister Munteanu is expected to focus on several priority areas, including EU integration, the rule of law, institutional reforms, economic growth and digitalization, as well as social protection and healthcare.

 

The new government’s ability to succeed will largely depend on its capacity to implement reforms effectively and maintain political cohesion. Although the ruling PAS defied the polls and retained its parliamentary majority, sustaining public confidence will require meeting citizens’ expectations, particularly when it comes to cost-of-living issues.

 

In parallel, Moldova’s proximity to Ukraine, ongoing tensions with Russia and the unresolved issue of the Russian-controlled Transnistria region make geopolitical volatility a constant factor. After notable progress in recent years, it also remains to be seen how Moldova can further its EU integration objectives, given the ongoing uncertainty around the European bloc’s handling of the Moldovan (and Ukrainian) membership bids. Economic and security shocks could also challenge reforms, while also testing the resilience of the new government.