FP’s Situation Report, presented by Lockheed Martin: Taliban declares victory in Afghanistan; Germany is spying on citizens with suspected ties to the Islamic State; Japan and South Korea team up to counter North Korea; and much more.

By David Francis with Sabine Muscat

The Taliban declares victory one day after NATO ends its mission in Afghanistan. Taliban insurgents have been waging a brutal campaign across Afghanistan in the run up to the end of America’s longest war. The Taliban is claiming victory after NATO’s mission closed in Kabul Sunday. The group also promised to continue its campaign against the Afghan government until the departure of the remaining 13,000 foreign troops, including 9,800 from the United States.

FP’s Reid Standish: “In the lengthy statement, [Taliban spokesman Zabihullah] Mujahid said the war had exacted a heavy toll from the United States and its allies while leaving them precious little to show for their human and financial losses.… The Taliban’s media wing, which consists of both official and unofficial spokesmen, is no stranger to prodding and trolling ISAF publicly. For the Taliban and its supporters, publicly ridiculing ISAF has been part of a carefully crafted campaign to discredit the mission and portray it as a failure.” More here.

More on Afghanistan below.

German worries about the Islamic State outweigh privacy concerns. Germans have long been the most vocal critics of National Security Agency spying, despite using intelligence collected by the agency and spying on Turkey, a NATO ally. A new report reveals German domestic spying operations on an estimated 550 domestic Islamic State sympathizers. This revelation forces Germany to face an uncomfortable truth: Berlin needs good intelligence as much as Washington and has to invade personal privacy to get it. It’s also an acknowledgment that Germany, with a large Turkish Muslim population, is at risk of a homegrown Islamic State attack.

The Washington Post’s Greg Miller: “Over the past year, Germany has secretly provided detailed information to U.S. spy services on hundreds of German citizens and legal residents suspected of having joined insurgent groups in Syria and Iraq, U.S. and German officials said.… The stream of information includes names, cellphone numbers, e-mail addresses and other sensitive data that German security services — ever mindful of the abuses by the Nazi and Stasi secret police — have been reluctant even to collect, let alone turn over to a suspect ally.” More here.

More on the Islamic State below.

Japan and South Korea are teaming up against North Korea. For the first time, Japan and South Korea will share intelligence on North Korean weapons programs. Intel will be shared via the United States. This deal is an acknowledgment that Seoul and Tokyo share a common and unpredictable enemy in North Korean leader Kim Jong Un. But it also marks an important and symbolic step for American allies long at odds in a region the White House wants to make a priority.

The New York Times’ Martin Fackler: “[A]nalysts said the fact that the memorandum was signed at all represented a possible warming of the relations between the two nations. They said that while Japan had always been more open to signing such an agreement, South Korea had to overcome deep distrust about Japan to sign the deal.” More here.

More on North Korea below.

Welcome to Tuesday’s edition of the Situation Report.

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Who’s Where When Today

Secretary of Defense Chuck Hagel, Deputy Secretary of Defense Bob Work, and Chairman of the Joint Chiefs of Staff Army Gen. Martin E. Dempsey have no public or media events on their schedules.

President Obama is on vacation in Hawaii.

10:00 a.m. U.N. Security Council meets on Sudan and South Sudan.

What’s Moving Markets

The Guardian’s Jill Treanor on the first signs of recession in Russia: “The prospects for the country’s economy are expected to remain weak after President Vladimir Putin’s government revealed that GDP in November was 0.5% lower than in the same month a year ago.” More here.

Reuters’s Samantha Sunne on historically low oil prices: “Crude oil prices on tumbled on Monday, with global grades settling down more than $1 a barrel after an early rally fizzled and prices fell to their lowest levels since May 2009.” More here.

The Financial Times’ Kerin Hope and Elaine Moore on fears of another Eurozone crisis after elections in Greece: “Monday’s dramatic events revive dormant questions about Greece’s place in the eurozone, just two years after the country’s debt crisis nearly triggered a break-up of the currency union and shook the European project to its core.” More here.

Afghanistan

The Wall Street Journal’s Margherita Stancati and Habib Khan Totakhil on continuing violence: “[T]he fighting is as intense as it has ever been since the U.S. invasion in 2001. This year, Taliban fighters launched large-scale offensives in the countryside and stepped up high-profile attacks in cities. While the insurgents weren’t able to capture new territory, according to Afghan and foreign officials, security has deteriorated and Afghan troops and civilians are dying in record numbers.” More here.

The Washington Post’s Dan Lamothe on rebranding the American mission: “[T]here’s another related mission also now underway: Operation Freedom’s Sentinel. Defense Secretary Chuck Hagel said in a statement Sunday that will include two core components: working with allies and partners on Resolute Support, and continuing ‘counterterrorism operations against the remnants of Al-Qaeda to ensure that Afghanistan is never again used to stage attacks against our homeland.’” More here.

Islamic State

Writing for Foreign Policy, Nicholas Heras and Dafna H. Rand on Syria’s moderate, secular Southern Front: “The coalition, which binds together roughly 50 armed groups, has generated a singular example of civil-military governance in Syria — creating a ‘third way’ of local governance that threatens Bashar al-Assad’s depiction of the Syrian opposition movement as extremists and terrorists.” More here.

AFP on attacks against Shiite pilgrims that killed 17: “The attack in the Taji area, which targeted a tent serving refreshments to pilgrims, also wounded at least 35 people. Pilgrims from Iraq and abroad are making their way to Samarra, north of Baghdad, to commemorate the death of Hassan al-Askari, one of the 12 revered Shiite imams, who is buried in the city.” More here.

Al Arabiya on an Islamic State attack on a gas plant: “ISIS claimed responsibility for a car bomb, which exploded near a gas plant in Syria’s Homs province on Monday killing eight people, including four soldiers, and wounding 15, a monitoring group said.” More here.

Reuters with details on new U.S. airstrikes: ‘The U.S.-led coalition launched 18 air strikes against Islamic State on Monday, including 12 in Syria and six in Iraq, the Combined Joint Task Force said in a statement. In Syria, the strikes hit near the border town of Kobani as well as Raqqa and Day az Zawr. In Iraq, the strikes hit near Mosul, Sinjar and Asad, according to the statement.” More here.

North Korea

The Associated Press’s Hyung-jin Kim on reunification talks: “South Korea on Monday proposed talks with North Korea to discuss what it calls a range of issues needed to prepare for the unification of the divided countries.” More here.

Reuters’s Mark Hosenball and Jim Finkle on suspicions that North Korea had help with the Sony hack: “As North Korea lacks the capability to conduct some elements of the sophisticated campaign by itself, the official said, U.S. investigators are looking at the possibility that Pyongyang ‘contracted out’ some of the cyber work.” More here.  

Politico’s Tal Kopan on an alternate theory: “FBI agents investigating the Sony Pictures hack were briefed Monday by a security firm that says its research points to laid-off Sony staff, not North Korea, as the perpetrator — another example of the continuing whodunit blame game around the devastating attack.” More here.

Russia

FP’s David Francis on how Putin undermined Russia’s hockey dreams: “In the past, he’s offered star players like Ilya Kovalchuk big contracts to lure them away from America and Canada. But because of Russia’s economic problems stemming from Putin’s action in Ukraine and low oil prices, some of the league’s 22 teams can’t pay their players or coaches.” More here.

EUobserver’s Andrew Rettman on a new dialogue between Brussels and Moscow: “Federica Mogherini, the EU’s foreign policy chief, has said the bloc should launch a new ‘debate’ with Russia aimed at ending the ‘confrontation’ over Ukraine.” More here.

Voice of America on a possible thaw between Russia and Ukraine: “Ukrainian President Petro Poroshenko said on Monday he intended to meet January 15 with Russian President Vladimir Putin, German Chancellor Angela Merkel and French President Francois Hollande.” More here.

China

FP’s David Wertime on a protest against China’s Gmail outage: “In a now-deleted post, one frequent Weibo user from Shenzhen directed readers to sign an online White House petition asking (in English) that the United States voice concern over the blocking’s ‘effect on global economy and welfare.’” More here.

Iran

Politico’s Lucy McCalmont on a possible U.S. embassy in Iran: “The president, echoing remarks he’s made in the past, said if a nuclear deal with Iran were reached it ‘would serve as the basis for us trying to improve relations over time.’” More here.

Pakistan

The New York Times’ Zalman Masood on Pakistan suspending the detention of a suspected terror leader: “The Islamabad High Court said on Monday that the militant commander accused of masterminding the 2008 Mumbai terrorist attacks should be allowed to post bail and win his release, despite government efforts to continue holding him.” More here.

Dawn’s Mubarak Zeb Khan on a new U.S. aid package for Pakistan: “The United States Congress has notified a $532 million civilian assistance package for Pakistan under the Kerry-Lugar Act, said US Ambassador to Pakistan Richard G. Olson during a meeting with Federal Minister for Finance Ishaq Dar.” More here.

Sydney

The Sydney Morning Herald’s Matthew Knott on gunman Man Haron Monis being honored by the Islamic State: “In the foreword to sixth edition of Dabiq, Islamic State’s official English-language magazine, the terrorist group says Monis’ actions ‘brought terror to the entire nation’ and erased his history of ‘shirk and transgression.’” More here.

Libya

Writing for Foreign Policy, Bel Trew on Libya inching closer to all out war: “For three years, Libya has been without a functioning government, police force, or army. The country has been ripped apart by warring fiefdoms of ex-rebels who helped oust Qaddafi but have since directed politics with AK-47s and anti-aircraft guns.” More here.

Africa

FP’s Siobhán O’Grady on strikes against Boko Haram: “Cameroon has ordered its first-ever airstrikes against Boko Haram, the Islamist group responsible for the infamous kidnapping of 270 schoolgirls in northern Nigeria last spring, after the group overran a Cameroonian military base and attacked five nearby villages.” More here.

Reuters on U.S. action against al-Shabab: “The U.S. military launched an air strike in Somalia on Monday targeting a senior leader of the al Qaeda-aligned al Shabaab militant group, the Pentagon said.” More here.

Ebola

The Wall Street Journal’s Betsy McKay and Peter Wonacott on lessons learned: “The tepid initial response to West Africa’s Ebola outbreak exposed holes in the global health system so gaping it has prompted the World Health Organization to consider steps to prevent a repeat, including emergency-response teams and a fund for public-health crises.” More here.

The New York Times’ Kevin Sack, Pam Belluck, Adam Nossiter, and Sheri Fink on Ebola’s comeback: “After more than 20,000 cases and 7,800 deaths, it can be hard to recall that there was a moment in the spring when the longest and deadliest Ebola outbreak in history might have been stopped. But without a robust and coordinated response, an invisible epidemic was allowed to thrive alongside the one assumed to be contained.” More here.

Revolving Door

From FP’s John Hudson: “Evan McMullin, a senior adviser for counterterrorism issues on the House Foreign Affairs Committee, is leaving the panel to become the House Republican Conference’s new chief policy director. During his two years on the committee, McMullin traveled to the Middle East extensively and dedicated much of his time to the civil war in Syria. Working behind the scenes, he often pushed the panel to adopt a more interventionist approach to the bloody conflict. The new job will see his portfolio and management responsibilities increase dramatically as a range of domestic policy issues are added to his remit. He’ll begin the job after the holiday break.”

Alexis Serfaty, senior advisor for aviation and international affairs at the U.S. Department of Transportation, is leaving. From an e-mail to colleagues: “In January I join the U.S.-U.A.E. Business Council as Vice President and chief of staff, supporting the Council’s continued growth and advancing the many new joint ventures and partnerships the U.A.E. already has in place with major U.S. companies.”

And finally, FP’s Elias Groll on holiday drama in Argentina: “Let’s say I were to tell you that this Christmas the president of Argentina, Cristina Fernández de Kirchner, adopted a nice young Jewish boy to prevent him from turning into a werewolf. Would you believe me? Probably not, right? But not so most of the Western media.” More here.