Insight: What is happening in Europe and Asia in February 2026?

The month of February was marked by decisive political consolidation across Asia alongside renewed multilateral maneuvering on security and trade, while Europe grappled with industrial competitiveness, inflation recalibration, and persistent geopolitical strain. In Asia, electoral outcomes in Japan, Thailand, and Bangladesh signaled the strengthening of dominant political forces and the reconfiguration of post-crisis governance landscapes, occurring in parallel with expanding regional engagement in U.S.-led diplomatic initiatives over Gaza and recalibrated bilateral trade alignments, including Indonesia’s renewed economic pact with Washington. On the other spectrum, Europe balanced structural economic ambition with security fragility: the finalization of the India–EU trade agreement and proposals for a “Made-in-Europe” industrial framework underscored strategic economic assertiveness, even as slowing inflation offered cautious relief amid renewed Russian strikes on Ukraine’s energy grid and political uncertainty triggered by Denmark’s snap election. Taken together, developments across both regions in February 2026 reflected a pattern of consolidation and recalibration, as states sought to fortify domestic authority while navigating an international order increasingly shaped by economic nationalism and unresolved security fault lines.

Asia:

1. Japan’s LDP wins landslide majority in snap elections

   ER - Japan's ruling Liberal Democratic Party (LDP) secured a landslide victory in the country's snap lower house elections on February 9.

   
   

   Led by Prime Minister Sanae Takaichi, the LDP won 316 of the 463 seats, which is well beyond the 233 necessary to secure a majority. Including the Japan Innovation Party with 36 secured seats, the prime minister’s coalition now holds a total of 352 lower house seats.

   
   

   The snap elections were held following Takaichi's dissolution of the lower chamber last January in an aim to regain the LDP's reassertion of majority in its 233 LDP-led coalition in a similar gambit in 2024. As a whole, the LDP has ruled Japan for the majority of the last 70 years.

   
   

   In a speech, Takaichi affirmed that the party will "grit its teeth" and fulfill its commitments to the public as Japan moves to amend its Constitution, which will need two-thirds in both chambers of the Japanese Diet. The Japanese constitution has not been amended since 1947 [NHKa, NHKb].

2. Thailand’s lower house shake-up puts Bhumjaithai in lead

   ER - Thailand’s recent lower house elections produced comparable results with Japan’s power consolidation in February 2025.

   
   

   Thai Prime Minister Anutin Charnvirakul’s conservative Bhumjaithai Party secured 170 out of the 400 constituency seats seated in its lower house following the series of events involving former coalition partner and leading lower house party Pheu Thai.
   

   This is Bhumjaithai’s strongest electoral performance in history. While the Thai Election Commission has yet to verify the allocation of the remaining 100 seats reserved for the politicians elected from their party’s ranked candidate list, local preliminary data show its projected leadership exceeding 190 seats  [ข่าวช่องวัน, Election Commission of Thailand]

3. Bangladesh enters post-Hasina era with BNP’s parliament victory

   ER - In South Asia, the Bangladesh Nationalist Party (BNP) secured a decisive majority in its parliament on February 14. The Party won 212 out of the 299 seats in the newly elected legislature according to the country's election commission on February 6. 

   
   

   The South Asian nation was earlier touted for leading a student-led protest that led to the ouster of former prime minister Sheikh Hasina. The protest, triggered by the reinstatement of the civil service quota system in 2024, led to Hasina’s exile to India and the resignation of her government after 15 years. 

   
   

   Bangladesh's first parliament after the elections led to the BNP with 212 seats, the Islamist Jamaat-e-Islami Party with 68 seats, the student-led National Citizen Party with 6 seats, and 14 seats for other parties.

   
   

   BNP leader Tariq Rahman promised a revitalization of Bangladesh's economy, clean politics and a reset with its neighbors as the leader considers the outcome a win to re-establish the country’s democracy. In a post-conference speech, Rahman called for unity among political parties as the South Asian nation strengthens its constitution, institutions and law and order moving forward [Bangladesh Nationalist Party, Bangladesh Election Commission].

4. Asian nations attend Board of Peace high-level meeting convened in Washington

   ER - Amid continuing tensions in Gaza, the 27-member Board of Peace convened for the first time in the United States (US).

Several commitments have been placed following the inaugural meeting, including:

US' $10 billion contribution to the Board;

• Commitment to send troops to the planned International Stabilization Force for Gaza for Albania, Indonesia, Kazakhstan, Kosovo and Morocco;

• Agreement to an accumulated US$7 billion for the Gaza relief package from Azerbaijan, Bahrain, Kazakhstan, Kuwait, Morocco, Qatar, Saudi Arabia, UAE and Uzbekistan; and

• Plans to oversee the United Nations.

  
  

  The Board of Peace was launched on the sidelines of the World Economic Forum in January 2026 as part of the US' 20-point peace plan for Gaza in response to the continuing escalating tensions between Israel and Palestine over Gaza.

  
  

  Several Asian countries have formally signed the agreement, including Azerbaijan, Bahrain, Cambodia, Indonesia, Israel, Jordan, Kazakhstan, Kuwait, Mongolia, Pakistan, Qatar, Saudi Arabia, the United Arab Emirates (UAE), Uzbekistan and Vietnam. 

  
  

  Meanwhile, India, Japan, Oman, South Korea and Thailand are currently engaged in observer capacities [US White House, Time].

5. Indonesia-US reciprocal trade deal signed anew

   ER - On the sidelines of the Board of Peace negotiations, meanwhile, Indonesia and the US have reached a reciprocal trade agreement to ease their bilateral trade barriers through a newly signed reciprocal trade agreement.

   
   

   Under the deal, Indonesia vowed to eliminate tariffs for 99% of American goods while the US continues to maintain tariffs on most Indonesian goods at 19%. More than 1,700 Indonesian products, including spices, coffee, rubber, chocolate and palm oil,  are now exempt from tariffs following this agreement.

   
   

   Meanwhile, the Southeast Asian nation will lift trade barriers on American goods including agriculture, seafood, technology, and healthcare, among others, with commitments to buy billions of dollars' worth of US goods such as Boeing jets, energy, beef, cotton and soy and the development of US firms in developing Indonesia's infrastructure for rare earth materials [US White House, US Embassy and Consulates in Indonesia].

Europe:

1. India–EU FTA finalized following two decades of talks

   MA - India and the European Union (EU) have finalized a landmark Free Trade Agreement (FTA), following nearly two decades of recurring negotiations, with the conclusion announced on 27 January 2026 at a summit in New Delhi. The deal, described by both Indian Prime Minister Narendra Modi and EU Commission President Ursula von der Leyen as the “mother of all deals,” aims to liberalize trade in goods and services between two significant markets — together representing around 2 billion people and roughly a quarter of global GDP. 

   
   

   Under the agreement, tariffs on the vast majority of traded goods will be eliminated or significantly reduced. EU exporters will save an estimated €4 billion annually in duties, benefiting sectors such as the automotive, machinery, chemicals, pharmaceuticals, wine and spirits, and food industries. India has agreed to reduce tariffs on a wide range of European imports, including industrial goods and vehicles, while maintaining protections for certain sensitive domestic sectors, such as dairy and agriculture. Tariffs on Indian exports — such as textiles, leather, gems, jewelry, and marine products — to the EU will also be phased down, extending preferential access to up to 93–99% of Indian exports over time. [European Commission, Ministry of Commerce and Industry, Government of India, Euronews, Politico, EU Observer]

2. European Commission proposes ‘Made-in-Europe’ law 

   MA - The European Commission has proposed a new law that necessitates a percentage of products subsidized by public money to be “made in Europe”. The main aim of this initiative is to push European industries to compete in the sphere of manufacturers from countries like China.  The EU aims to support its domestic industries through the financial power of public procurement, accumulated over 2 trillion euros, to prioritize locally produced goods in public contracts.

   
   

   Set to be published by February 26, the “Industrial Accelerator Act” will introduce mandatory sustainability and local production criteria for goods acquired through government tenders and for industries receiving state-supported manufacturing incentives. Through this framework, each priority sector will defer to tailored rules requiring a certain proportion of components to originate from within Europe. [European Parliament, Reuters, Bruegel, Modern Diplomacy]

3. Eurozone inflation slows to 1.7% amid energy price drop

   MA - Inflation across the Eurozone has slowed to 1.7 percent in January, according to figures released by Eurostat, the statistical office of the European Union. Largely driven by a sharp drop in energy costs, this marks a slowdown from December 2026’s percent rate and places the inflation below the European Central Bank’s 2 percent benchmark.

   
   

   Energy prices were a significant factor behind the overall decline, slowing by a 4.1 percent rate in January 2026 – a lower decrease when compared to the 1.9 percent contraction seen the month before. However, the price for food, alcohol, and tobacco inflated, rising to 2.7 percent from December’s 2.5 percent. [Eurostat (EU), Reuters, Bloomberg]

4. Russian strikes Ukraine’s energy grid amid halted peace efforts

   MA - In February, Russia attacked Ukraine with strike drones and ballistic and cruise missiles, focusing on paralyzing the energy infrastructure. The overnight strikes hit Kyiv, Odesa, and central Ukraine. President Volodymyr Zelenskyy declared that the strikes also targeted Dnipropetrovsk, Kirovohrad, Mykolaiv, Poltava, and Sumy regions. The strike had a casualty of one person.

   
   

   The near-daily attacks on the energy infrastructure has brought attention from the U.S., with the U.S. trying to broker a peace deal between Russia and Ukraine, with halted process, with Russia instead demanding Ukraine to withdraw from parts of the controlled Eastern Donbas region. [Reuters, DW, AP]

5. Denmark’s PM calls snap elections following Trump’s acquisition threat

   MA - Denmark’s Prime Minister Mette Frederiksen has announced snap parliamentary elections to be held on March 24 following Donald Trump’s threats in acquiring the Arctic territory. She announced that this would be a decisive election, “We need to define our relationship with the United States, and we must rearm to ensure peace on our continent”, as quoted.

   
   

   This announcement rises after Frederiksen surged in the public opinion polls opposing Trump’s threats to invade Greenland. Although Trump has retreated from his original threat to seize Greenland with force, Frederiksen suggested that the U.S. is still a prevalent threat to Denmark’s security. [Euractiv, BBC, DW, The Guardian]

Contributors:

ER: Prince Ernest Eugene Ronson Sabado

MA: Laksmitha Anindyanari