Eight Key Iranian Developments Following ‘Al-Aqsa Flood’

In December, Iranian Supreme Leader Ali Khamenei led the funeral prayer for Quds Force leader Razi Mousavi. Photo: Khamenei's website
In December, Iranian Supreme Leader Ali Khamenei led the funeral prayer for Quds Force leader Razi Mousavi. Photo: Khamenei's website
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Eight Key Iranian Developments Following ‘Al-Aqsa Flood’

In December, Iranian Supreme Leader Ali Khamenei led the funeral prayer for Quds Force leader Razi Mousavi. Photo: Khamenei's website
In December, Iranian Supreme Leader Ali Khamenei led the funeral prayer for Quds Force leader Razi Mousavi. Photo: Khamenei's website

As the “Al-Aqsa Flood” operation by Hamas and the Gaza war began, Iran was already dealing with the fallout from protests sparked by the death of Mahsa Amini, making the autumn of 2022 one of the bloodiest in the country’s recent history.

The war in Gaza erupted at a crucial time for Iran’s leadership, which was facing international pressure over its crackdown on protests, its drone supply to Russia, and stalled nuclear talks.

From the start, Tehran described Hamas’ attack as a “natural and spontaneous reaction” to what it called Israel's “provocative war policies” and actions by the far-right Israeli Prime Minister.

Iranian officials denied any role in planning the operation, but their diplomatic moves suggested they were prepared for the conflict’s impact on the region.

Less than a week after the attack, Iran’s late Foreign Minister, Hossein Amir-Abdollahian, began a regional tour, meeting with leaders of countries and groups allied with Iran, including in Iraq, Syria, Lebanon, and Qatar.

His aim was to coordinate efforts and send regional messages.

Iran also warned Israel that it could face multiple fronts if its military actions in Gaza didn’t stop.

Tehran has since worked to strengthen the image of armed groups in the region, pushing to legitimize its support for these factions amid the ongoing political and regional unrest.

This marked a key moment for Iran, as Tehran claimed it had elevated the “Resistance Axis” groups from a regional to a “global” level, referring to this shift as a move from the “World of Resistance” to the “Global Resistance.”

In doing so, Iran, which had been trying to ease tensions with its neighbors, adopted a more aggressive stance towards groups linked to it. Many saw this as part of Iran’s broader strategy to expand its influence across the region.

Officially, Iran told the international community that these groups act independently, make their own decisions, and produce their own weapons.

However, several Iranian officials have acknowledged the role of Gen. Qassem Soleimani and the Revolutionary Guards in supplying weapons and technology to these groups.

Iran’s second significant move after the Al-Aqsa Flood came a month into the Gaza war when Supreme Leader Ali Khamenei called for cutting off Israel’s “economic lifelines,” especially oil and energy routes.

Iranian-backed groups, especially the Houthis, began attacking commercial ships in the Red Sea, disrupting shipping for months.

At the same time, Iran-aligned militias in Iraq launched drone attacks on Israel and US bases in the region.

The US responded after one of its bases in Syria was attacked, striking positions held by these militias.

Politically, Iran insisted that its allied groups’ demands be met for any Gaza ceasefire, and it opposed international peace proposals, especially the “two-state solution.”

In December, Iran’s foreign minister even noted that both Iran and Israel rejected the two-state plan.

In the third phase, Israel ramped up airstrikes against Iranian forces in Syria. In December, an Israeli strike killed Razi Mousavi, a key Iranian logistics officer.

A month later, the Revolutionary Guards confirmed the death of their intelligence chief in Syria. The biggest blow came in April, when an Israeli airstrike on a meeting at the Iranian consulate killed Gen. Mohammad Reza Zahdi, Iran’s top military commander in Syria and Lebanon.

In its fourth major escalation, Iran nearly went to war with Israel after responding to the bombing of its consulate by launching hundreds of missiles and drones directly from its territory.

Israel claimed it intercepted the attack but retaliated by striking a radar system at a military airport in Isfahan, near a key nuclear site.

This clash heightened fears of a shift in Iran’s nuclear ambitions, with growing talk in Tehran about developing deterrent weapons and Israel threatening to strike Iran’s nuclear facilities.

The fifth key moment for Iran followed the deaths of President Ebrahim Raisi and Foreign Minister Hossein Amir-Abdollahian in a helicopter crash near the Azerbaijani border. Authorities quickly denied conspiracy theories, ruling out an Israeli attack.

Three months later, Iran’s military confirmed the crash was caused by bad weather, but some questions remained unanswered.

During this period, Iran’s political focus shifted away from the Gaza war due to the presidential election and efforts to form a new government.

Candidates in the election avoided discussing the Gaza conflict or Iran’s support for Hamas, despite criticism over ignoring pressing issues like sanctions and stalled nuclear negotiations.

Most candidates only praised Iran’s missile program and vowed to strengthen deterrence against Israel.

The sixth major event occurred during the inauguration of Iran's new president, Masoud Pezeshkian, on July 30, when Hamas leader Ismail Haniyeh was assassinated at a Quds Force facility in northern Tehran, marking a significant turn in the Gaza war.

Khamenei promised to respond to the “violation of Iranian sovereignty” following the assassination of a “guest of Iran.”

Officials and military leaders varied in their tone and language of threats but consistently stressed the need for a response as time passed and doubts about Iran’s actions increased.

Haniyeh's assassination in Tehran raised significant questions about the operation, especially regarding potential security breaches.

The seventh key moment was marked by the “Pager Bombings,” alongside a message of de-escalation from Pezeshkian, particularly towards the US and Israel.

Before traveling to New York, Pezeshkian stated at a press conference that Iran does not want to destabilize the region or export its revolution. He expressed a willingness to engage with the US if it shows it is not hostile, even referring to the US as “brotherly.”

During meetings at the UN General Assembly, he reiterated, “Iran is ready to set aside its weapons if Israel does the same,” according to an audio recording.

Pezeshkian explained that the delay in Iran’s response to Haniyeh’s assassination was due to indications that a ceasefire agreement between Israel and Hamas was imminent, expressing frustration over the lack of progress and ongoing Israeli attacks.

Pezeshkian downplayed Hezbollah’s ability to confront Israel independently, challenging the narrative from officials close to Khamenei.

His remarks, along with concerns about possible security breaches during the “Pager Bombings” and the targeting of Hezbollah leaders, raised suspicions in Tehran about vulnerabilities in Iran’s defense and heightened fears of internal security lapses.

The eighth and most critical phase began with the assassination of Hezbollah Secretary-General Hassan Nasrallah, a key figure in Iran’s regional strategy, second only to Gen. Soleimani.

The Israeli airstrike on Nasrallah’s headquarters also led to a significant loss for the Revolutionary Guards.

Nasrallah is highly regarded among Iran’s leaders, especially conservatives. His name has occasionally been mentioned as a potential successor to Khamenei, but such a candidacy would likely face opposition from various political factions due to his non-Iranian status.

In response to the assassinations of Haniyeh and Nasrallah, Iran launched its second direct missile attack on Israel.

This prompted Israel to threaten retaliation, indicating it could target various facilities, including oil refineries, fuel stations, and nuclear and military sites.

The situation between Israel and Iran remains highly volatile, with the potential for further escalation.



Borderless Europe Fights Brain Drain as Talent Heads North

Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo
Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo
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Borderless Europe Fights Brain Drain as Talent Heads North

Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo
Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo

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.