The Situation · Edition 3

Friday, 3 July 2026

Following the death of Ali Khamenei, the leadership in Tehran is banking on a large state funeral intended to demonstrate the regime's continued capacity to act and its internal cohesion. The timing is delicate, for the recent war with Israel and the United States has weakened the Islamic Republic militarily and politically and sharpened the question of succession at the top. While voices close to the regime present the mourning ceremony as proof of mass loyalty, critical observers such as The Economist read the choreography as a facade over deeper upheavals within the system.

In the Western Balkans, the judicial reckoning with the war crimes of the 1990s continues: a court in Kosovo, in a retrial, upheld the twelve-year prison sentence against the Bosniak Ekrem Bajrovic for crimes against ethnic Albanian civilians. In Moldova, Prime Minister Alexandru Munteanu unexpectedly announced his resignation after a series of corruption scandals, plunging the small country, balanced between ties to the West and Russian influence, into a delicate phase of political uncertainty.

Economically, the Turkish government announced that it will gradually phase out the automatic tax offset on fuels introduced during the Iran war by October 2026, pointing to rising prices at the pump and additional inflationary pressure. In the technology sector, Türk Telekom and the state-linked defense company Aselsan presented a roadmap for a domestically produced smartphone, a push for technological self-reliance that nonetheless faces considerable pressure amid the global memory chip crisis.

Hormus-Iran-Krise Türkei-Finanzen Türkische Technologie-Souveränität Westbalkan Moldau

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Geopolitics

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Iran Stages Khamenei's Funeral as a Show of Power

Hormus-Iran-Krise

The Iranian regime is using the funeral for the late Supreme Leader Ali Khamenei to project strength and unity in the wake of the war with Israel and the United States. Observers read the staging more as a sign of just how much the Islamic Republic has already changed.+ more perspectives

Following the death of Ali Khamenei, the leadership in Tehran is banking on a grand state funeral meant to demonstrate the regime's continued capacity to act and its internal cohesion. The timing is delicate: the recent war with Israel and the United States has weakened the Islamic Republic militarily and politically and sharpened the question of succession at the top. Interpretations differ depending on the camp. Voices close to the regime present the funeral as proof of mass loyalty and continuity. Critical observers such as The Economist, by contrast, read the choreography as a facade behind which a far-reaching transformation of the system is unfolding. The source base on this backfill day is thin and rests mainly on a Western liberal framing; Iranian primary sources are missing. It remains open whether the show of power will have a stabilizing effect internally or merely paper over the rivalries around the succession.

The Economist

Geopolitics

Kosovo Convicts Bosniak of War Crimes After Retrial

Westbalkan

A Kosovo court upholds the twelve-year prison sentence against Ekrem Bajrovic in a retrial for war crimes against ethnic Albanian civilians. The acts in the Istog region include mistreatment, torture and killings.+ more perspectives

A court in Kosovo has upheld the twelve-year prison sentence against the Bosniak Ekrem Bajrovic in a retrial. He was found guilty of war crimes against ethnic Albanian civilians in the Istog/Istok region, including beatings, torture and killings during the Kosovo war. The verdict shows that the legal reckoning with the crimes of the 1990s in the Western Balkans is still ongoing and is being pursued across ethnic lines. For the communities affected, the past thus remains an open and emotionally charged field. The report comes from Balkan Insight; further perspectives, such as that of the defense, are not documented on this backfill day. The case adds to the continuing debate over justice and reconciliation in the region.

Balkan Insight

Moldova: Prime Minister Munteanu Resigns Unexpectedly

Moldau

Moldovan Prime Minister Alexandru Munteanu resigns unexpectedly, deepening political uncertainty in the country. High-profile corruption scandals threaten the credibility of the pro-European government.+ more perspectives

Moldovan Prime Minister Alexandru Munteanu has unexpectedly announced his resignation, triggering a phase of political uncertainty. The trigger is a series of prominent corruption scandals that weigh on the standing of the pro-European government. For the Republic of Moldova the timing is delicate, as the small country is balancing between Western alignment and Russian influence, and domestic stability is decisive for its EU course. An abrupt change of leadership can delay reforms and give pro-Russian forces a boost. The report is based on Balkan Insight; details on the background of the resignation and on the succession remain open on this backfill day. The government now faces the task of quickly regaining its ability to act and public trust.

Balkan Insight

Economy

Turkey to Phase Out Fuel Tax Offset by October

Türkei-Finanzen

Ankara plans to gradually wind down its mechanism for offsetting taxes on fuel by October. The measure had been introduced to shield consumers from sharply higher oil prices during the Iran war.+ more perspectives

The Turkish government has announced that it will gradually abolish the mechanism for automatic tax offsetting on fuel by October 2026. During the Iran war the instrument had cushioned the impact of sharply rising oil prices at the pump and thus eased the burden on consumers. By withdrawing it, Ankara is signaling that it regards the price spikes as temporary and wants to relieve the public purse. For households this means higher fuel prices going forward and additional inflationary pressure in an already strained environment. The state-aligned Daily Sabah presents the step as a normalization after the crisis; independent dissenting voices are missing on this backfill day, so the framing remains one-sided. The move fits into the ongoing realignment of Turkish fiscal policy.

Daily Sabah

Technology

Türk Telekom and Aselsan Present Roadmap for Domestic Smartphone

Türkische Technologie-Souveränität

Telecoms group Türk Telekom and defense manufacturer Aselsan present a roadmap for a smartphone built in Turkey. The push comes at a difficult moment, shaped by the global memory chip crisis.+ more perspectives

Türk Telekom and the state-aligned defense and electronics group Aselsan have announced a partnership, together with a roadmap, for a domestically produced smartphone. With it, Ankara is pursuing the goal of technological self-reliance and wants to reduce its dependence on foreign manufacturers. The timing is demanding: Turkish smartphone production is under strain because of the worldwide memory chip crisis and price pressure. Aselsan brings experience from defense electronics, which also gives the project a security policy dimension. The source is the state-aligned Daily Sabah, which frames the step positively as proof of national innovative strength; critical or market-oriented assessments are missing on this backfill day. Whether the roadmap turns into a competitive product depends largely on the availability of chips and on economies of scale.

Daily Sabah