Insight: What is happening in Europe and Asia in July 2025?
- steareditorial
- Aug 1
- 9 min read

July has been a lively month in terms of European-Asian relations, signalling a mixed picture of both increasing multilateral cooperation but also rising tensions and escalating conflicts.
We note new economic and security agreements signed between Germany and the United Kingdom, the Philippines and Lithuania, and the United States and the European Union and observe the results of these agreements and their significance in both regions. We also note the challenges presented in this month's trade summit between representatives from Beijing and Brussels, and the E.U’s internal approval of fresh sanctions on the Russian regime.
Furthermore, we continue to monitor developments in conflict in the regions. We observe the significance of the Israeli military’s killing of aid-seeking civilians in Gaza, and analyse changing attitudes to the war reflected by Slovakia’s barring of two extremist Israeli ministers. We will also continue to observe the rising tensions between Thailand and Cambodia, punctuated this month by a retaliatory Thai airstrike against Cambodian military infrastructure.
The Editorial Office also notes the emergence of several political crises in the regions, namely Japan’s upper house election results, the Taiwanese parliamentary recall effort, the removal of the former Thai prime minister, and the confidence vote in the European Commission president.
Europe:
EU agrees new Russia sanctions package.
[BD] The EU presented its 18th sanctions package against Russia on 18 July, aiming to apply further pressure on the country’s oil and energy sectors.
Among the package's main points is a new cap on Russian oil exports, which has been lowered to $47,60 per barrel, roughly 15% below its market price. The Group of Seven (7) had previously implemented a cap of $60 per barrel, to varying degrees of success.
The package also included a complete ban of the import of Russian petroleum products following a transitional period of six months. Transactions concerning the underwater NordStream pipelines will also be sanctioned.
The package’s introduction had been delayed due to concerns from Slovakia about a separate deal to ban all Russian gas imports from 2028 onwards, with Bratislava giving in after receiving guarantees from the EU regarding its potential financial losses.
[Reuters]
Von der Leyen survives a confidence vote.
[BD] EU Commission President Ursula von der Leyen (EPP) survived a vote of no-confidence in the European Parliament on 10 July, initiated by the assembly’s far-right groups.
Von der Leyen had previously come under fire from several parliamentary groups due to violations of the EU’s institutional procedures, her backtracking of the Green Deal as well as her lack of transparency.
The motion had been forwarded by members of the far-right ECR. While members of Von der Leyen’s coalition partners - Renew (RE; centre) and the Socialists & Democrats (S&D; centre-left) - used the hearing to express their criticism regarding Von der Leyen’s style of governance, they ultimately refrained from supporting the motions, citing Europe’s need for stability in uncertain times.
As part of a deal between the EPP and S&D to ensure the latter’s support, Von der Leyen promised to retain the European Social Fund, which aims to tackle poverty, as part of the upcoming EU budget starting in 2027.
[Politico]
New Ukraine-Russia round of peace negotiations this week amidst fresh drone attacks.
[BD] Russia promised to exchange additional prisoners of war during peace negotiations with Ukraine on 23 July in Istanbul, while a ceasefire is still not in sight.
The swap included both military and civilian prisoners for the first time since negotiations started. However, both sides are still wide apart regarding the negotiation of a ceasefire agreement, with Russia insisting Ukraine should definitively refrain from its aspirations to join NATO and recognize Russian territorial gains since 2014.
The talks came about after Volodymyr Zelenskyy called on Russia to accelerate negotiations to reach a ceasefire. Whilst Ukraine hopes to arrange a meeting between Zelenskyy and Putin by September, Kremlin spokesperson Dmitry Peskov has repeatedly ruled out such a scenario, citing “diametrically opposed” positions between the two countries.
[NPR]
Slovenia becomes first EU state to bar two Israeli ministers from entry.
[BD] Slovenia became the first EU country to ban two Israeli ministers - National Security Minister Itamar Ben Gvir and Finance Minister Bezalel Smotrich - from entering its territory on 17 July, accusing them of “extreme violence and serious violations of the human rights of Palestinians”.
Ben Gvir and Smotrich, who are members of the far-right Otzma Yehudit and National Religious Party–Religious Zionism parties respectively, have taken a hard-line stance on Israel’s war against Hamas and the country’s illegal settlements on the West Bank in the past.
The move showcases the increasingly critical stance of many EU member countries regarding Israel’s military conduct in the Gaza strip.
EU confirms beginning of new entry/exit system.
[BD] The EU has announced the introduction of a new entry/exit system at the bloc’s borders for non-EU nationals on 30 July, which will come into effect on 12 October this year.
The new system aims to increase border security by introducing new awareness campaigns and strengthening measures to identify travellers who overstay their Schengen visa, which is normally valid for a period of 90 days within a 180 day period.
Non EU-nationals seeking to enter the EU through its external borders will need to register at so-called “registration kiosks”, where their names, biometric data, passports and fingerprints will be processed.
[Euronews]
UK-Germany mutual defence agreement.
[BD] Germany and the UK signed a mutual defence agreement on 24 July, aiming to increase cooperation and coordination in the fields of defence development and procurement.
The pact was signed in Berlin by German Defense Minister Boris Pistorius (SPD) and his British counterpart John Healey. Besides procurement and development, the pact also foresees increased coordination on weapon deliveries to Ukraine and the tackling of cybersecurity threats.
The first of its kind between the two NATO members, the deal comes as the Labour-led government under Keir Starmer seeks to strengthen ties with the EU following years of cold relations after the UK left the EU in 2020.
EU and US reach last minute trade agreement.
[BD] EU Commission President Ursula Von der Leyen and US President Donald Trump reached an agreement on tariffs and trade on 27 July, as details of the deal sparked harsh criticism among EU member states and parliamentarians.
The centrepiece of the deal is a general 15% tariff on EU exports to the US, with an exception for steel, which will still be taxed at 50%. Car imports, which had been taxed at a 27.5% rate so far, will also drop down to 15%.
The EU also agreed to imports of energy worth $750 billion within the next three years, as well as investing $600 billion into the US economy.
The deal was heavily criticized by France, with Trade Minister Laurent Saint-Martin stating that the EU should have retaliated earlier in order to negotiate better conditions.
Asia:
Philippines and Lithuania have signed the Memorandum of Understanding to counter common threats
[HN] On June 30, 2025, Philippine Defence Secretary Gilberto Tedoro Jr. and Lithuanian Secretary Dovilė Šakalienė signed the Memorandum of Understanding (MoU) to strengthen defence cooperation between the two countries. Although geographically distant from one another, both countries are threatened by what they call “the coordinated authoritarian axis” composed of China, Russia, Iran, and North Korea.
The MoU opens up prospects for closer collaboration in cybersecurity, defence technology development, ammunition production, and maritime security between the Philippines and Lithuania in the future. On Lithuania’s side, Šakalienė emphasized that Lithuania seeks to support like-minded democratic nations in resisting the global threats posed by the authoritarian axis. Secretary Teodoro stated that the memorandum represents a widening and deepening of partnerships as a counter to China’s recent belligerent actions, particularly those concerning the Philippines’ sovereign claims in the South China Sea. [TheDiplomat]
Ruling Coalition loses majority in Japan’s Upper House Election
[HN] In the House of Councillors election held on July 20, Japan’s ruling coalition, comprising the Liberal Democratic Party (LDP) and Komeito, lost its majority. As such, only 47 seats, where the LDP won only 39 seats, the third-lowest number in the party’s history, and Komeito reached a historic low of just eight seats. It is the first time in the LDP’s history that the party has failed to hold a majority in both houses of the National Diet. Although Prime Minister Ishiba stated that he would remain in office, he now faces tremendous pressure from within his party after such a poor showing.
Opposition parties, led by the Constitutional Democratic Party of Japan (CDPJ) and the Democratic Party for the People (DPFP), secured key seats in contested constituencies as people grew increasingly dissatisfied with the government’s fiscal policy. The ruling coalition’s policy of distributing cash handouts to tackle inflation proved unpopular, while the opposition parties all called for a reduction in the consumption tax. In this context, stalled and strained tariff negotiations with the United States have also proved troublesome for the ruling camp. [TheJapanNews]
China and E.U. achieve limited progress while tensions over trade and Ukraine persist after the tense summit
[HN] The 25th China–E.U. Summit was convened in Beijing to mark the 50th anniversary of diplomatic relations. The summit brought together the leaders at the top level, including President of the European Council Charles Michel, President of the European Commission Ursula von der Leyen, and Chinese President Xi Jinping. The three priority topics of the summit were international challenges, economic and trading relations, and geopolitical challenges.
The summit reported some positive outcomes. China committed to increasing the caps on the exportation of rare earths to Europe, a move that will benefit the European technology sector in the years to come. Additionally, there was a consensus between the two on global warming and cooperation in sustainable development. The two also reaffirmed their desire to maintain dialogue alive and stabilize the relationship, especially considering that China remains the E.U.’s second-largest trading partner.
However, there were some tensions that remained unresolved nonetheless. Ursula von der Leyen complained about the growing trade deficit and called for more balanced access to the Chinese market, particularly for European exports like pork and spirits. Beijing’s de facto support of Russia in the war against Ukraine is also the most significant source of contention in diplomatic relations. While the E.U. was urging China to be more active in pushing Russia to sign a ceasefire, China refused to undertake such a responsibility.
A pragmatic and guarded relationship characterized the summit between China and the E.U. While several small technical agreements were concluded, underlying strategic and political tensions suggest that a completely cooperative partnership remains unlikely in the near future. [TheConversation]
Thai Prime Minister suspended by the Constitutional Court after a leaked phone call.
[HN] The Prime Minister Paetongtarn Shinawatra has been suspended from office by the Constitutional Court due to a scandal over a leaked phone call with former Cambodian Prime Minister Hun Sen. In the call, she showed disregard for the Thailand army and openly criticized a Thai general, sparking a strong wave of outrage amid claims that she was insulting the military and undermining national interest.
Deputy Prime Minister Suriya Juangroongruangkit will be the alternative prime minister until the court issues a final ruling. The incident has sparked a new political crisis in Thailand and raised questions over the Shinawatra family’s grip on national politics. [The Independent]
An F-16 fighter was scrambled targeting Cambodia by Thailand as a retaliatory action amid the border conflicts.
[HN] On July 24, a Thai F-16 fighter bombed Cambodian military positions, intensifying the fighting in the border region between the two countries. It was the first use of Thai combat aircraft since the conflict erupted in June.
Thailand declared that the airstrikes bombed a Cambodian army position after a Thai border outpost was shelled, killing at least two soldiers. The Thai Ministry of Defence claimed the action was a legitimate act and urged Cambodia to stop firing. Cambodia condemned the airstrikes as escalating the conflict and vowed to respond appropriately.
Since the outbreak of violence, dozens of people on both sides have been killed, and thousands of civilians have been driven out of the conflict zones. The international community, the United Nations and nearby ASEAN countries still call for restraint and negotiations, but there is no indication that tensions will subside. Analysts warn that in the absence of a reconciliation mechanism, this border clash could pose a serious threat to regional stability in Southeast Asia. [Reuters]
Recall vote fails in Taiwan, President Lai faces challenges amid rising tensions with China
[HN] A recall election against 24 other members of the Kuomintang (KMT) took place in Taiwan on July 26. The results showed that no member was defeated in office, which was a setback for President Lai Ching-te’s ruling Democratic Progressive Party (DPP) and its ambitions to capture the legislature. Supporters of the recall had attempted to oust the KMT legislators, accusing them of having close ties with China, but the effort ultimately failed.
President Lai now faces considerable challenges as the opposition is expected to continue leveraging its legislative majority to block government bills and cut budgets. This could directly impact Lai’s plans to increase defence spending amid rising political tensions with China.
Beijing closely monitored the survey and reacted positively to the outcome. Chinese media and the Taiwan Affairs Office also mimicked KMT rhetoric and used the findings to condemn President Lai and the DPP. [Al jazeera]
Israel military conducted its first combat operation in Deir al-Balah
[HN] On July 28, the Israeli army launched its first combat action within Deir al-Balah in the central Gaza Strip. It is the only city that remains unscathed since the beginning of the 21-month war. The combat took place after leaflets were dropped by Israel at dawn, calling residents to evacuate within just 2 hours.
Deir al-Balah is believed to be where Hamas is holding a large number of hostages, and it strikes fear among many families about Israel’s military action. Israel claims that the current conquest of Gaza is a consequence of forcing Hamas to free the hostages, becoming a key point of contention in the ceasefire negotiations.
The attack has severely impacted humanitarian operations as the WHO reported that Israeli forces raided their main headquarters, detained staff, and damaged the central warehouse in the evacuation zone. The U.N. health agency accused Israel of firing on Palestinians waiting to receive aid. Under the deteriorating situation, 25 Western countries are calling for an end to the war in Gaza and criticising Israel’s restrictions on humanitarian assistance amid the spreading famine in the Gaza Strip. [APNews]
Contributors:
BD: Benedikt Stöckl
HN: Kim Khánh Hà (Hanna)