The Top 5 Risks of 2015

What are the biggest political risks that we face in the coming year? And how can we go about ranking them?

Here at Eurasia Group, we’ve just released our Top Risks report, doing just that for 2015.

How do we define a global risk? It’s a combination of expectations, probability and impact—and relevance for 2015 in particular. A global political risk is one where the impact on markets is currently underappreciated. That impact needn’t be all bad: after all, each of these risks creates problems for some…and opportunities for others.

These rankings reflect our forecast on which stories are most likely to play out over the next 12 months, which will cut deepest, and where we can expect surprises.

Without further ado, here are the top 5 risks of 2015 (in reverse order to add suspense…). Enjoy!

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Top Risk #5: ISIS, beyond Iraq and Syria.

ISIS faces military setbacks in Iraq and Syria, and it’s maxed out the low-hanging fruit: control of areas with heavily Sunni populations that are more amenable to the Sunni Caliphate’s rule. But even if ISIS as a sovereign territory is a red herring for the coming year, ISIS as a brand is anything but. Its ideological reach will spread throughout the Middle East and North Africa. It will grow organically by setting up new units in Yemen, Jordan, and Saudi Arabia, and it will inspire other jihadist organizations to join its ranks. The risk to neighboring states will worsen.

Top Risk #4: The weaponization of finance.

To achieve foreign policy goals without military might, Washington is weaponizing finance on a new scale. It is using carrots (access to capital markets) and sticks (varied types of sanctions) as tools of coercive diplomacy. But this strategy will damage relations with allies, particularly in Europe, and US companies will find themselves caught in the crossfire between Washington and sanctioned states.

Top Risk #3: The effects of China slowdown…outside China.

President Xi Jinping’s ambitious economic reforms require lower levels of (more sustainable) growth. The continuing slowdown will likely have little impact inside the country—especially with lower oil prices helping Xi Jinping enact his reforms—but that’s cold comfort for the expanding list of economies that depend on booming trade with a commodity-hungry China. Countries of particular note are Brazil (China is its largest trading partner), Australia (heavily dependent on China’s demand for its iron ore and coal), Indonesia (65% of its exports are commodity related), and especially Thailand, where a slowdown in the country’s top export destination will make things harder for the ruling junta.

Top Risk #2: A rumbling Russia.

Sanctions and lower oil prices have weakened Russia, but they will not force President Vladimir Putin to reverse course in Ukraine. US and European sanctions could well tighten. As Russia’s economy sags, Putin’s approval ratings will depend increasingly on his willingness to confront the West. Western companies and investors are likely targets, on the ground and in cyber-space. Conflict could extend further afield. Moldova is particularly at risk. Watch Russia’s attempts to undo aspects of the US-led global security and financial orders.

Top Risk #1: The politics of Europe.

Anxiety is again on the rise over Europe’s economics, but there is no sense of crisis to force political leaders to work together. And when that sense of crisis comes, European leaders’ ability to coordinate will be more constrained. In 2015, anti-EU political parties will continue to gain popularity, undermining the drive for much-needed reform. Friction is growing among European states, as peripheral governments increasingly resent the influence of a strong Germany unchecked by a weak France or absent Britain. Watch out for this year’s elections in Greece and Spain. Russia and ISIS will add to Europe’s security worries from the outside-in.

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If you’re interested in reading the full-fledged report with far more detail on all of these risks—and the risks that round out our top 10, as well as some red herrings—you can find it on our website.

Infographics built by Eurasia Group.

Ian Bremmer is president of Eurasia Group, global research professor at New York University and foreign affairs columnist at TIME. You can follow him on Twitter, Facebook and LinkedIn.