Geopolitical hotspots to watch in 2015: Eurasia Group

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With U.S.-Russia relations in shambles and increasing friction among euro zone members, brace for an even more "tumultuous" year in geopolitics in 2015, Eurasia Group warned.

"2015 will see more geopolitical challenges than 2014," Ian Bremmer, president of Eurasia Group wrote in a report titled Top Risks 2015 published Monday.

The political risk consultancy ranked the politics of Europe, Russia, the effects of China's slowdown, the weaponization of finance and ISIS as the top five in a list of 10 risks facing the world.

"I'm very far from a pessimist, but for the first time since starting the firm in 1998, I'm starting to feel a serious undercurrent of geopolitical foreboding," Bremmer said.

From the face-off between Russia and the West over Ukraine to China's increasingly aggressive tactics to defend its territorial claims in the South China Sea, political conflict among the world's top powers is more in play than at any time since the end of the Cold War, said Eurasia.

Geopolitical hot spot

With ties between euro zone states strained and the Russian crisis set to escalate, the region will produce several crisis headlines this year.

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"At the grass roots, it's a surge of public anger across Europe. While there's a level of social instability attached to that, the immediate problem is a range of political movements that are developing momentum. Some are far left; others are far right," Bremmer said.

"All are euroskeptic, and all are challenging establishment parties that have lost political legitimacy. Their rise has been dramatic, shows little sign of slowing, and will become politically meaningful in 2015," he said.

Outside the euro zone, Russia will remain a major risk to global security.

"The conflict with the West over Ukraine has crystallized a newly aggressive and explicitly anti-Western Russian foreign policy. Western sanctions, a sagging oil price, economic stagnation, and the ruble's plunge are weakening Russia economically and financially, though not driving it to the point of crisis," Bremmer said.

"A Kremlin that feels antagonized and isolated but not substantially constrained is a dangerous prospect," he added.

Differences over how to deal with Russia, meanwhile, may threaten European Union-U.S. relations.

"American unilateralism is a challenge for Europe on most every level. Washington has more interest in punishing Moscow and less interest in safeguarding Europe's economic wellbeing," Bremmer said.

Coping with China's slowdown

Moving away from geopolitics, China's shift towards slower, more sustainable growth will prove challenging for several countries reliant on commodity exports to the mainland namely Brazil, Australia, Indonesia and Thailand.

The world's second largest economy is expected to grow around 7 percent in 2015, down from an estimated 7.4 percent last year.

The greatest pressure may be in politically unstable Thailand, Bremmer said, where weaker demand in China will weigh on economic growth prospects that will in turn undermine the ruling junta's legitimacy and increase pressure to return the country to democracy.

New weapon of choice

The U.S. will increasingly engage in the "weaponization of finance" - the use of carrots (access to capital markets) and sticks (varied types of sanctions) as tools of coercive diplomacy – to exert its influence over global outcomes.

"Access to the U.S. marketplace and U.S. banks, and Washington's ability and willingness to use them, are becoming more important as instruments of foreign and security policy," Bremmer said.

"In the background looms the ultimate threat: that the United States will financially isolate rogue states by severing their access to capital and the infrastructure used to clear payments. Risks of miscalculation and unintended consequences are high, because use of these tools is new and Washington is learning how they work by trial and error," he said.

ISIS expansion

While Islamic militant group ISIS faces setbacks in its core bases of Iraq and Syria, its power remains significant and will spread throughout the Middle East and North Africa.

ISIS will set up new units in Yemen, Jordan, and Saudi Arabia, and will inspire many jihadist organizations to join its ranks, said Bremmer, noting that Ansar Bayt al Maqdas in Egypt and Islamists in the Libyan city of Derna have already pledged allegiance to ISIS leader Abu Bakr al Baghdadi.