The Iron Sky Curtain is an event that passes by on an extremely rare, random occasion.
When
The event happens at completely random times, but has an extremely low chance of starting. It is started by the passing of a Communist Demon in the sky, and since Communist Demons are one of the rarest enemies in the game, they have a low chance of triggering the event. It lasts for 72 hours, and then passes quickly.
Where
The Iron Sky Curtain affects the European regions.
What
The Iron Sky Curtain event boosts the stats of the Soviet Faction and all Communists by 10. The stats of all other European factions decrease by 10, and any Capitalists who enter the European regions also have their stats decreased by 10. After the event passes, all the changes instantly revert to normal. When the event is in progress, the sky turns dark, and a cloud with the communist symbol appears in the sky. If the player is in Europe and had acquired a custom skybox from The Skybuilder, they will not see the communist cloud, but they will get the effects nonetheless.