War on Gaza Strains Relations between Iran, Syria

It appears that the war on Gaza has impacted Iran’s military deployment in Syria. Local sources said Tehran has started to put in place plans for the relocation of Iranian Revolutionary Guards (IRGC) headquarters from the Damascus countryside to regions close to the border with Lebanon after the killing of several of its prominent members in Israeli strikes in recent months.

Syria has notably taken “neutral” and even “cold” stances towards Iran in wake of these developments, amid Iranian suspicions that Syrian security agencies could have leaked information about its officers who were later targeted by Israel.

Iran also appears to be alarmed by Damascus’ openness to overtures to return to the Arab fold, which could be interpreted as distancing itself from Tehran.

Asharq Al-Awsat was in Syria where it witnessed how the deployment of gunmen at the Sayyeda Zainab region has become limited to Lebanese Hezbollah members when Iran’s presence used to be felt in the past. The area is a destination for Shiite visitors from Iran, Iraq, Lebanon, Pakistan and Afghanistan.

Local sources in the town of Hujeirah north of Sayyeda Zainab told Asharq Al-Awsat: “This is the headquarters of Iranian religious and military leaders. Ever since Israel intensified its strikes on the region, we have started to see very little of them. We have hardly seen them as of late. They have disappeared.”

Israel struck in April the Iranian consulate in Damascus, leaving seven people dead, including Mohammad Reza Zahedi, commander of the IRGC’s Quds Force in Syria and Lebanon. The development was a blow to Iran who after a decade of conflict in Syria, had sent tens of thousands of Iraqi, Afghan and Pakistani militia members to back the Damascus regime.

Fears and evacuation plans

A source close to a high-ranking Iranian “adviser” in Syria spoke of the deep fear over his life the latter is experiencing in wake of the repeated Israeli strikes. He quoted the adviser as saying that he was being forced to “sleep in the open over fears for his life”.

Sources from pro-Iran militias in the Damascus countryside said Tehran has come up with plans to evacuate IRGC members from Syria given “the mounting Israeli pressure.” They are expected to leave through Damascus International Airport and across the border with Iraq.

The IRGC had already evacuated its known headquarters in the Damascus countryside and relocated to areas to close to the Lebanese border, said local sources that observed their movement.

Israel had intensified its strikes against Iranian targets in Syria since the eruption of the war on Gaza on October 7.

Sayyeda Zainab

Sayyed Zainab is viewed as the main headquarters of the Iranian forces in Syria. Now, it has become devoid of Iranians or militias loyal to them. The forces quit the area in wake of an Israeli strike that killed Reza Mousavi, a top commander, in December.

Asharq Al-Awsat toured the area and noted that gunmen deployed in the area are limited to Hezbollah members.

In spite of the situation on the ground, Iranian Ambassador to Syria Hossein Akbari stressed that his country will not withdraw militarily from the country.

Commenting to Syria’s Al-Watan newspaper on reports that the Iranian advisers were leaving, he said: “We are present in Syria, and we will never withdraw from it.”

Iran was Syria’s top backer from the early days of the Syrian conflict that broke out in 2011. It has supported it on the political, military and economic levels. Around 3,000 IRGC members are deployed in the country, according to the Syrian Observatory for Human Rights.

Influence

Hezbollah is the most powerful Shiite militia in Syria and it comes only second to the IRGC in terms of influence, a source close to the party told Asharq Al-Awsat.

The party is focusing on managing communication with regular Syrians, it added. The party leaders are “very keen on avoiding provoking Syria’s Sunni majority.” They have forged good relations with society figures in areas where they are deployed, such as al-Qusayr in Homs and al-Qalamoun in the western Damascus countryside.

In many instances, they have protected locals against the practices of the Syrian security forces, said the source.

For the Syrian authorities, the discipline of Hezbollah members and leaderships is seen in a positive light, contrasted with the Iraqi militias that are undisciplined, said another source.

On relations between Damascus and Hezbollah, a source close to the Syrian authorities told Asharq Al-Awsat that Hezbollah leaderships “always intervene to ease tensions that may arise with Iranian or Iraqi militias.”

“We enjoy a long history of cooperation with them. They understand our way of thinking,” he added.

Moreover, he said Hezbollah Secretary General Hassan Nasrallah has long used his personal influence with Syrian President Bashar al-Assad to “resolve several disputes”. He recently played a role in easing tensions between Syria and Iran, leading him to defend during a recent televised address Syria’s decision to not become involved in the war on Gaza.

Syria distances itself

Contrary to Iran’s allies in Lebanon, Iraq and Yemen, the authorities in Syria chose to remain on the sidelines in the war. For example, the Israeli-occupied Golan Heights has seen little unrest.

Sources in Damascus said: “The Iranians fail to understand Syria’s neutral position on Gaza and its refusal to open the Golan front.”

The Iranians believe their country “has paid dearly in defending the Syrian regime, which in turn, is luring dialogue offers from the West that are seen as a reward for its decision to distance itself” from the war. “This is something the Iranians will not accept,” they added.

They explained: “Some Syrian officials believe that any Iranian regional gain will inevitably come at Damascus’ expense as evidenced by how terrified the regime was at the beginning of the war on Gaza of Iran and the United States possibly striking a deal.”

As tensions between Damascus and Tehran continue, Iranian advisers in Syria have said they no longer hold the same respect among the people.

“We have no value here in Syria. No one cares about us. Back home, I was in charge of an entire province and the people were grateful to me. Here, no one even respects us,” a source quoted an Iranian general in Syria as saying.

Jaramana: The Iraqi ‘capital’

The situation is viewed differently by the leaders of various Iraqi militias. They believe they know the Syrians better than the Iranians and Lebanese militants.

“Hezbollah officials believe we must cater to the Syrian officials. The Iranians share the same view, but our experience has shown that the Syrians may openly adopt a hard line, while in fact they are actually much weaker than they appear,” a source quoted a medium-ranked Iraqi militia member as saying.

Damascus officials have criticized Iraqis for their excessive involvement with the Syrians, most notably in Jaramana city in the eastern Damascus countryside. The city has become known as the Iraqi “capital” given the heavy presence of the militias there.

The source said the fighters spend their time at the nightclubs in the city, “which poses high security risks.” He also spoke of doubts harbored by the Iranians that the militias may have leaked information about the Iranians and Hezbollah in Syria.

Hezbollah has been informed of several leaks that can be traced back to its own members.

Relations turn cold

Syrian security agencies have also been suspected of leaking sensitive information about the Iranians to Israel that led to the killings of Iranian officials, “who died in defense of the Syrian regime.”

President Assad has also referred to retirement several security and military officials who were in charge when Iran was deepening its influence during the war and so understand all it has offered the country, further straining relations between Tehran and Damascus.

Sources following the course of Syrian-Iranian relations told Asharq Al-Awsat that the developments took place as Iran is secretly alarmed by the Arab openness towards Damascus and the regime turning towards the Arab fold.

The shift is seen as a response by Damascus to agreements reached between Iran and the US that did not sit well with the regime. One such deal was the 2022 agreement reached between Lebanon and Israel over their joint maritime border, said the sources.

The tensions continue. Iran has been exerting more pressure on the Damascus government to pay debts owed to it, in a bid by Tehran to impose more restrictions and extract more commitments from it so as to limit is ability to maneuver in the region.

In August 2023, a classified Iranian government document was leaked to the media. It spoke of how Tehran spent 50 billion dollars on the war in Syria in ten years. The sum is viewed as a debt it wants Damascus to pay in the form of Iranian investments in phosphates, oil and other resources in Syria.

The Syrians at the time approached the Iranians for a denial of the document, but they refused, saying they do not comment on media claims. This was interpreted as an Iranian move to lead Syria and Arab countries to believe that Damascus was shackled by Iranian debts, informed sourced told Asharq Al-Awsat.

The sources following the Syrian-Iranian ties quoted a Syrian official as saying: “We went along with the Iranians, but we realized that they have not fulfilled several of their commitments. We are now trying to get out of this situation. This is our chance and we must explore it for the sake of the future of our country.”

Gaza rift

The war on Gaza has revealed a rift between Tehran and Damascus. The informed sources said Damascus sensed there was a possibility to normalize relations with the West because it refused to become involved in the war.

Signs have emerged that Syrian-Iranian relations have grown cold. No Iranian officials were invited to the Quds Day commemoration that was held south of Damascus in April. Posters of the Iranian president, Supreme Leader Ali Khamenei and Hezbollah’s Nasrallah were noticeably absent at the event in contrast to previous years.

Meanwhile, a fuel shortage in Syria appears to have deepened, another sign of strains with Iran, which is the country’s main supplier.

And on the advent of the holy fasting month of Ramadan earlier this year, Assad exchanged cables of congratulations with several Arab leaders. His exchange with Iranian officials was notably not covered by the media. Congratulations on the Eid al-Fitr holiday with Iran were also left out of the coverage.

Until recently aerospace engineer Pedro Monteiro figured he'd join many of his peers moving from Portugal to its richer European neighbors in the quest for a better-paid job once he completes his master's degree in Lisbon.
But tax breaks proposed by Portugal's government for young workers - up to a temporary 100% income tax exemption in some cases - plus help with housing are making him think twice.
"Previous governments left young people behind," said Monteiro, 23, who is studying engineering and industrial management at the Higher Technical Institute in the Portuguese capital. "The country needs us and we want to stay but we need to see signs from the government that they are implementing policies that will help."
Monteiro cites in particular the cost of buying or renting a home amid a housing crisis aggravated by the arrival of wealthy foreigners lured by easy residency rights and tax breaks, Reuters said.
He is doubtful the government's new measures will be enough.
"Some of my friends are now working abroad and earn substantially more money... and have better career development opportunities," he said. "I'm a little bit skeptical concerning my job opportunities here in Portugal."
Portugal is the latest country in Europe to seek to tackle a brain drain holding back its economy. Tax breaks for young workers in the budget currently going through parliament will take effect next year and could benefit as many as 400,000 young people at an annual cost of 525 million euros.
Talent flight to wealthier countries of the north is a problem Portugal shares with several others in southern and central Europe, as workers take advantage of freedom of movement rules within the trade bloc. Countries including Italy have tried other schemes to counter the flight, with mixed results.
By exacerbating regional labor shortages and depriving poorer countries of tax revenues, it is yet another hurdle for the EU as it tries to improve its ebbing economic growth while addressing population decline and lagging labor productivity.
Donald Trump's victory in US elections this month raises the stakes, with the risk of across-the-board trade tariffs on European exports of at least 10% - a move that economists say could turn Europe's anaemic growth into outright recession.
About 2.3 million people born in Portugal, or 23% of its population, currently live abroad, according to Portugal's Emigration Observatory. That includes 850,000 Portuguese nationals aged 15-39, or about 30% of young Portuguese and 12.6% of its working-age population.
More concerning still is that about 40% of 50,000 people who graduate from universities or technical colleges emigrate each year, according to a study by Business Roundtable Portugal and Deloitte based on official statistics, costing Portugal billions of euros in lost income tax revenue and social security contributions.
DEMOGRAPHIC HELL
"This is not a country for young people," said Pedro Ginjeira do Nascimento, executive director of Business Roundtable Portugal, which represents 43 of the largest companies in the nation of 10 million people. "Portugal is experiencing a true demographic hell because the country is unable to create conditions to retain and attract young talent."
Internal migration within the EU is partly driven by the disparity in wages between its member states. Some economic migrants also say they are looking for better benefits such as pensions and healthcare and less rigid, hierarchichal structures that give more responsibility to those in junior roles.
Concerns are mounting over the long-term viability of Europe's economic model with its rapidly ageing population and failure to win substantial shares of high-growth markets of the future, from tech to renewable energy.
Presenting a raft of reform proposals aimed at boosting local innovation and investment, former European Central Bank chief Mario Draghi said in September the region faced a "slow agony" of decline if it did not compete more effectively.
Eszter Czovek, 45, and her husband are moving from Hungary to Austria, where workers earn an average 40.9 euros ($29.95) per hour compared to 12.8 euros per hour in Hungary, the largest wage gap between neighboring countries in the EU.
The number of Hungarians living in Austria increased to 107,264 by the beginning of 2024 from just 14,151 when Hungary joined the EU.
Czovek's husband, who works in construction, was offered a job in Austria, while she has worked in media and accounting at various multinationals. She cited better pay, pensions, work conditions and healthcare as motives for moving. She also mentioned her concern over the political situation in Hungary, which she fears might join Britain in leaving the EU.
"There was a change of regime here in 1989 and 30 years later we are still waiting for the miracle that will see us catch up with Austria," Czovek said of the revolution over three decades ago that ended communist rule in Hungary.
Since Brexit, the Netherlands has replaced Britain as a preferred destination for Portuguese talent while Germany and Scandinavian countries are also popular.
Many Europeans still head to the United States in search of better jobs - about 4.7 million were living there in 2022, according to the Washington-based Migration Policy Institute, which nonetheless notes a long-term decline since the 1960s.
In 2023, 4,892 Portuguese emigrated to the Netherlands, surpassing Britain for the first time, which in 2019 received 24,500 Portuguese.
At home, they face the eighth-highest tax burden in the Organization for Economic Co-operation and Development (OECD) even as house prices rose 186% and rents by 94% since 2015, according to property specialists Confidencial Imobiliario.
A single person in Portugal without children earned an average of 16,943 euros after tax in 2023 compared to 45,429 euros in the Netherlands, according to Eurostat.
Portugal will offer under 35s earning up to 28,000 euros a year a 100% tax exemption during their first year of work, gradually reducing the benefit to a 25% deduction between the eighth and tenth years.
Young people would also be exempted from transaction taxes and stamp duty when buying their first home as well as access to loans guaranteed by the state and rent subsidies.
"We are designing a solid package that tries to solve the main reasons why the young leave," Cabinet Minister Antonio Leitao Amaro said in an interview with Reuters.
'THINGS WON'T CHANGE'
Leitao Amaro said he did not know for sure if the tax breaks would work but that his government, which came into office in April, had to try something new.
"If we don't act ambitiously, things won't change and Portugal will continue down this path," he said.
The Italian government has already found that tax breaks used as incentives are costly and open to fraud.
In January, Italy abruptly curtailed its own scheme that was costing 1.3 billion euros in lost tax revenue, even as it lured tech workers such as Alessandra Mariani back home.
Before 2024, returners were offered a 70% tax break for five years, extendable for another five years in certain circumstances. Now, it plans to offer a slimmed-down scheme targeting specific skills after it attracted only 1,200 teachers or researchers - areas where Italy has a particular shortage.
Mariani said the incentives were key to persuading her to return to Milan in 2021 by allowing her to maintain the same standard of living she enjoyed in London.
"Had the opportunity been the same without the scheme, I would not have done it at all," said Mariani, now working at the Italian arm of the same large tech company.
With her tax breaks poised to be phased out by 2026 unless she buys a house or has a child, Mariani faces a drop in salary and she said she's once again eyeing the exit door.

War on Gaza Strains Relations between Iran, Syria