Contagion from emerging markets Ukraine and Dubai, debt in the eurozone's weakest economies, British politics, climate talks in Copenhagen and tensions with Tehran could all affect Western European markets in December.

Below are five key risks to watch in the coming weeks.

EMERGING OVERSPILL

Fears that Ukraine will default on its debt default and Dubai's plan to restructure billions of dollars of state company debt both hit Western European markets last month, and both have the potential to do so again in the run-up to Christmas.

Ukraine is a focus of concern in the run-up to Jan. 17 elections with its $16.4 billion International Monetary Fund bailout already on hold and, despite recent conciliatory noises, fears of another New Year gas dispute with Russia. 

Investors will be keenly watching Dubai for details of restructuring and support from fellow emirate Abu Dhabi -- as well details of western banks' and companies' exposure.

What to watch

-- Dubai's restructuring: for stories please double click here

-- Ukraine Eurobond payments, which it says it will continue to make 

-- For other political risks from regional emerging markets, click here 

EUROZONE WEAK LINKS FALTER

Jittery markets have pressured the eurozone's weakest economies in the last week, boosting bond yields and credit default swaps debt insurance prices with Greece in particular feeling the pain.

Greece has faced downgrades and negative outlook changes from ratings agencies in the last month as its national debt was predicted to reach 135.4 percent of GDP in 2011 -- the highest in the EU -- from 104.6 percent this year.

Ireland has been under particular pressure, with the ruling coalition's fragile majority shrinking ahead of a key vote on austerity measures.

What to watch:

-- Greek efforts to regain market confidence, promises to tackle deficit 

-- Further defections from Irish Prime Minister Brian Cowen's ruling coalition.

-- Further moves in the bond and CDS markets put more pressure on countries to make painful cuts 

COPENHAGEN CLIMATE TALKS

Expectations for the Dec. 7-18 meeting have been generally faltering as it becomes closer, with a gulf remaining between developing and developed nations over how to control and reduce carbon dioxide emissions to limit climate change.

Denmark suggests the world should agree to halve greenhouse gas emissions by 2050 from 1990 levels, but does not spell out shorter term emission targets for rich countries. India describes suggestions as a dead end.

European Commission President Jose Manuel Barroso has warned current proposals are not enough for an effective pact , while major developed economies including China and India have formed a united front 

What to watch:

-- Does the ultimate agreement meet these basic requirements for success 

-- Will key emitters shift their current positions? That seems unlikely for now 

BRITISH POLITICS

Six months before an expected May election, political risk in Britain is already a major factor in financial markets.

Most polls predict a strong victory for opposition Conservatives but investors still fret over lack of policy clarity as well as potential shocks, both undermining sterling.

A Reuters poll of financial market and political analysts in October put a 75 percent chance of a Conservative victory, 15 percent of a hung parliament with no overall majority and a 10 percent chance of a Labour win.

For a foreign exchange trader idea to benefit from a hung parliament, click here 

What to watch:

-- Opinion polls. A Nov. 27 poll showed the Conservatives ahead in key parliamentary seats 

-- Policy details from the Conservatives, closely watched by markets for details of where and how they cut public spending. Any clues from third-party the Liberal Democrats on how they would act in a hung parliament.

-- Northern Ireland. Not an election issue, but a flare-up of dissident republican violence further dampen investor sentiment towards Britain.

IRANIAN TENSIONS

Oil prices spiked slightly this week after Iranian forces detained British yachtsman accusing them of straying into territorial waters.

The main focus remains Tehran's nuclear programme, with Iran angry over a rebuke from the International Atomic Energy Agency over a uranium enrichment site, threatening unspecified legal action and the building of a further 10 sites.

Tougher sanctions look likely. Markets will only react strongly to signs the region is moving closer to outright conflict that might affect oil supplies probably beginning with a military strike by the United States or perhaps Israel.

What to watch:

-- How serious are any sanctions? It looks as though Western powers will not target Iran's energy sector in order to ensure Russian and Chinese support at the UN Security Council

-- Will Iran withdraw from the nuclear Non-Proliferation Treaty. So far it has sent mixed signals