Tag Archive for: European Union

The Pacific cocaine corridor: A Brazilian cartel’s pipeline to Australia

Australia faces an emerging national security threat from Brazilian transnational crime groups. Once a domestic concern, Brazilian organised crime has evolved into a powerful narco-insurgency with transnational reach, making Brazil the world’s second-largest player in the cocaine trade after Colombia.

While Brazilian organised crime previously posed little threat to Australia, this report, The Pacific cocaine corridor: A Brazilian cartel’s pipeline to Australia, examines how Brazil’s expanding role in global cocaine supply, rising criminal network sophistication, and growing demand in Australia’s lucrative cocaine market are increasing the presence of Brazilian organised crime on Australian shores.

The report highlights how Brazil’s Primeiro Comando da Capital (PCC) has become a major transnational criminal threat, exploiting weaknesses in political, legal, and economic systems. It explores Brazil’s geography and criminal networks with South American cocaine producers and examines the PCC’s global distribution networks, with a focus on how the Pacific is increasingly used to transport drugs destined for Australia. A recent case study demonstrates the prioritisation of the Australian market in these operations.

The report concludes with recommendations for strengthening police cooperation, enhancing financial surveillance, and proactively detecting and disrupting PCC activities. By addressing key enablers of the PCC’s resilience and closing gaps in international information exchange, a coordinated approach will not only mitigate the immediate threat but also bolster Australia’s long-term defences against transnational organised crime.

Tag Archive for: European Union

Unity is the answer to Europe’s defence woes

US President Donald Trump’s hostile regime has finally forced Europe to wake up. With US officials calling into question the transatlantic alliance, Germany’s incoming chancellor, Friedrich Merz, recently persuaded lawmakers to revise the country’s debt brake so that defence spending can be boosted. European Commission President Ursula von der Leyen has called for an €800 billion fund to strengthen the EU’s hard power. And British Prime Minister Keir Starmer has pledged to increase defence spending to 2.5 percent of GDP by 2027, hoping to hit 3 percent by 2030.

All of this is long overdue. As Polish Prime Minister Donald Tusk put it in early March, it is absurd that ‘500 million Europeans are asking 300 million Americans to defend them against 140 million Russians’. Tusk meant that Europe has enormous defence potential, much greater than Russia and even greater than the United States, which has been guaranteeing Europe’s security since the end of World War II.

Tusk is right, of course: EU countries, plus Britain and Norway, are home to more than 500 million people. And if we add Turkey, Ukraine and Canada, the figure approaches 700 million. These countries have about three million active soldiers and another 1–1.5 million reservists. Mathematically, therefore, Europe has nothing to fear even if Trump were to withdraw the US from NATO, or condition the US’s response to aggression against an ally on, say, the ally’s elimination of tariffs on imports from the US.

That is hardly a far-fetched scenario. Poland must take seriously Elon Musk’s rude remarks to our foreign minister. Nor can we afford to dismiss the incoming US ambassador’s threat of ‘retaliation’ if our government introduces a tax on Google and Apple. It is not lost on us that other countries with such a tax—but which do not share a border with Russia, Belarus and Ukraine—have faced no similar threat by the US.

Today, no one can guarantee that Trump will honour Article 5 of the North Atlantic Treaty, according to which an attack on one NATO member is an attack on all. Will the leader of an EU or NATO country attacked by Russia be publicly berated and bullied by Trump and Vice President JD Vance in the Oval Office, as happened to Volodymyr Zelensky?

Fortunately, European politicians are recognising what needs to be done. French President Emmanuel Macron’s idea of extending France’s nuclear umbrella to cover all European NATO countries is a good starting point, as are discussions about constructing a European arms industry, which is virtually non-existent in many EU countries today. For example, the weapons and ammunition Portugal produces every year could pay for the purchase of only six or seven Abrams tanks.

The problem lies in the lack of genuine market unification in Europe. Imagine that I run a one-man company in Poland. To operate in another EU country, I would have to go through so many formal procedures—registration, opening a bank account, learning about national regulations (the labour code, workplace safety rules, environmental protection, personal data protection and more)—that it doesn’t make economic sense to try. In practice, a small company from one EU country cannot operate in another country.

The EU itself recognises this, which is why it has created a special corporate status, officially called the European Company. Such a company can operate according to a single set of regulations throughout the EU, but it must be large, with subscribed capital of at least €120,000. The giants can operate from Madeira to Bratislava, but for most companies the single market is still an unattainable goal.

The F-35 fighter jet and the Abrams tank are produced by many companies and subcontractors in different states across the US. In Europe, by contrast, politicians in individual countries protect entire industries, because their re-election hinges on the national economy, not the EU-wide economy. This is why Poland buys tanks from South Korea, even though Germany, Britain, France and Poland itself also produce tanks.

The subordination of Europe’s interests to the national interests of its member states is clearly visible today in the nuclear industry. Poland’s government wants a US-designed nuclear power plant in Poland, Hungary wants a Russian nuclear plant and Germans want no nuclear power at all. On paper, however, the EU is a leader in this field—the world’s second-largest producer of nuclear-generated electricity after the US, with China far behind.

Europe can be a global power. But as long as the governments of EU countries are accountable only to their own countries’ voters, that will not happen. Instead, Europe will continue to discuss the need for joint munitions production or research projects, but artificial intelligence will continue to be developed separately in centres in France, Britain, Poland or Germany.

We can then be happy that European countries have several million soldiers and a combined research budget exceeding that of China. But it will still be a paper tiger.

Europe is only as weak as it thinks it is

Europe has just held a rapid-fire series of high-profile summits. Following the Paris AI Action Summit and the Munich Security Conference, European leaders gathered for two emergency meetings in Paris to address the disturbing signals coming from the new administration in the United States. In each case, a central question was how Europe can catch up with the US and China technologically and militarily.

By now, it is obvious to everyone that US President Donald Trump’s administration intends to treat Europe with contempt, and that Europeans must take responsibility for their defence and security fully into their own hands. The US is not only sidelining European governments to negotiate an end to the war in Ukraine; it has also thrown its support behind European far-right parties and accused European liberals and democrats of betraying Western values.

Is there a method to this madness? Could the overture to Russia be an attempt to repeat president Richard Nixon’s strategy of breaking the alliance between communist China and the Soviet Union? We know that Trump is obsessed with China, and that Russians themselves have good reason to fear Chinese dominance. If sacrificing some part of Ukraine would allow Trump to strike a blow against his bete noire, he would surely seize the opportunity.

But this Nixonian manoeuvre is unlikely to succeed unless Trump secures Europe’s participation, and that seems unlikely. Paralysed by fear since Russia’s full-scale invasion of Ukraine in early 2022, Europe has forgotten that it can say no. But the Trump administration has shaken European leaders from their slumber. They are now taking an inventory of their strengths and exploring their options. Ukraine is not up against a wall yet. With increased support from Europe, its battle-hardened, highly innovative military can continue to resist Russia’s aggression.

Moreover, the Trump administration has not done much of anything yet except talk. Its real focus is on the home front, where it is busy gutting its own state capacity by mass firings. Trump’s war on the civil service—presumably the prelude to installing a skeleton crew of political loyalists—will inevitably cost the US money and reduce his ability to carry out his policy agenda.

The European Union, for its part, should not respond with the usual search for unity. Given the parties in power in Hungary, Slovakia and elsewhere, that is neither possible nor necessary. The better strategy is to build a coalition of willing EU member states and other countries that Trump is pointlessly alienating, such as Canada, Britain and South Korea.

This seems to be what French President Emmanuel Macron has in mind, judging by his recent statements. Many of his past warnings are now coming true. He remains one of the only leaders, alongside British Prime Minister Keir Starmer, who is not ruling out sending troops to Ukraine or the surrounding area. And lest we forget, France and Britain both have nuclear weapons.

Lost in the coverage following the rupture with the US is the fact that Western Europe is more fearful than Eastern Europe. We are arguably more familiar with crises, but we also are not the ones in Trump’s crosshairs. We do not have a huge trade surplus with the US, and we spend hundreds of billions of dollars on US-made weapons. Unlike the Netherlands (ironically the home of NATO’s new secretary-general), which spent around 1.7 percent of its GDP on defence in 2023, Poland spends almost 5 percent.

Judging by the flurry of recent speeches and statements from Republican officials, one might think that there are actually two Republican parties. On one hand, there is the old party that always sought to raise defence spending, strengthen US military alliances, and confront autocrats such as Russian President Vladimir Putin. On the other hand, there is the party of Trump’s MAGA movement, which seems to believe that national greatness requires dismantling the US state and abandoning longstanding alliances, all justified with primitive blood-and-soil rhetoric and conspiracy theories.

While it feels as if the entire world has changed overnight, the truth is that nothing really has happened yet. If Europeans would only open their eyes, they would see that they have all the resources, talent, and instruments they need to secure their sovereignty and restore peace and stability. They do not need an invitation to the table. They should take inspiration from Ukraine, which has single-handedly halted Russia’s march of aggression through sheer willpower.

This is no time for Europeans to panic. On the contrary, Trump has given us what we need the most: a reason to get our act together.

Poland’s path to remarkable prosperity

Browsing social media, I recently came across a map showing all the countries with GDP per capita higher than Poland’s back in 1990 and in 2018. The difference was striking. While 35 years ago there were quite a few such countries, not only in Europe but also in South America, Asia and Africa, in time their number has significantly decreased. In 2018 there were no longer any South American or African states highlighted on the map.

As of 2025, the group has shrunk even further. According to data from the International Monetary Fund, Poland’s GDP in 1990 was a mere US$6690 in current dollars. By 2024 it grew almost eight-fold to US$51,630 in terms of purchasing power parity. All that in just three decades, or one generation. And it goes on. According to the European Commission’s forecast, in 2024–25, the Polish economy will be the fastest growing large economy in the European Union.

How did it happen? Apart from the hard work of our citizens, two major factors—or, to be more precise, two institutions—contributed to our economic success: NATO and the EU.

The first, which Poland joined in 1999, provided security guarantees and helped overcome decades-old division between Eastern and Western Europe. The second, which we joined five years later, took the process of easing long-standing disparities one step further. It granted new member states access to ‘cohesion funds’ and most importantly to the common European market.

After the fall of communism in Poland in 1989 and the return of messy democratic politics, despite day-to-day political squabbles one thing remained constant no matter who was in power—Poland’s determination to join the two aforementioned organisations. Why?

We are a great nation but a medium-size country. We cherish our long history—this year marks a millennium since the coronation of our first king—but our population is much smaller than that of Beijing and Shanghai combined. Poland needs allies to boost its potential on the international stage.

What’s been true for Poland—in 1990 a poor country coming out of four decades of Russian domination and economic mismanagement—might well be true for many of the middle powers in Asia, Africa and South America looking for room to grow.

These countries often need what Poland desperately needed 35 years ago and still profits from: good governance, foreign investments with no strings attached, and above all political stability, rule of law and a predictable international environment with neighbours eager not to wage wars but work together for mutual benefit. In fact, these factors can benefit every country, no matter their GDP.

Today the international order is being challenged on multiple fronts, sometimes for good reason. Decades-old institutions—including the UN and its Security Council—are unrepresentative of the global community and incapable of dealing with the challenges we face. What they need, however, is to be thoroughly reformed, not entirely rejected.

To those desperate for change, force might look appealing. It would be a mistake. Abandoning forums for international dialogue and resorting to violence will not get us far.

Take Russia’s unprovoked aggression against Ukraine. According to Kremlin propaganda, it is a justified reaction to western imperialism that allegedly threatens Russia’s security. In fact, it is a modern-day colonial war against the Ukrainian people who—just like us Poles 30 years ago—want a better life and realise they can never achieve this goal by going back to subjugation to Russia. That is what they are being punished for—an effort to free themselves from the control of a former metropolis. The Kremlin’s aggression is a desperate struggle of a failing empire to restore its sphere of influence.

A Russian victory—may it never come—would not create a more just global order. It wouldn’t benefit countries dissatisfied with where things stand now. It wouldn’t even bring about a more just and prosperous Russia. Suffice to say there are now more political prisoners in Russia than there were in the 1980s when the Soviet Union invaded Afghanistan. There are many more casualties as well.

War is hardly ever a shortcut to prosperity. Over the past millennium, Poland experienced its share of invasions and uprisings against occupying forces. What finally brought us prosperity were three decades of peace, predictability, international cooperation and political stability.

That is why on assuming the presidency of the Council of the European Union, Poland made its priority clear: security in its many dimensions, including military, economic and digital. A Europe that is safe, prosperous and open for business can benefit not only Europeans but a greater global community. Just as it benefitted Poland over the past three decades.

It may sound dull, but it worked. Just look at the numbers.

How Europe can pay for rearmament

Europe urgently needs to rearm. Russia’s invasion of Ukraine, and the broader threat that President Vladimir Putin’s regime poses to Europe, requires nothing less. US President Donald Trump’s administration has also now made clear that neither Ukraine nor the United States’ NATO allies can count on continued US support. Perhaps this particularly brutal wake-up call will finally jolt European governments out of their complacency.

If so, the big question is how to finance the requisite increase in military investment at a time when Europe’s economies are weak, public finances are stretched and many voters are loath to accept cuts to other government spending. The scale of the challenge is indeed daunting. Russia’s economy is on a war footing, its army is battle-hardened, and it has a huge stockpile of nuclear weapons. Even though Europe’s economy dwarfs Russia’s, a recent report by the International Institute for Strategic Studies estimates that, after adjusting for purchasing power, Russia’s military expenditure last year (US$462 billion) was higher than Europe’s (US$457 billion).

Europe’s big powers have struggled to meet NATO’s previously agreed peacetime target of spending at least 2 percent of GDP on defence. France and Germany managed barely more than that last year, while Britain reached 2.3 percent of GDP. These figures are woefully inadequate for an age when war has returned to the continent and Europe must provide for its own security.

Trump wants NATO’s European members to raise their defence spending to 5 percent of GDP, while NATO Secretary General Mark Rutte acknowledges the need for ‘considerably more than 3 percent.’ Poland has already upped its military spending to over 4 percent of GDP, with the aim of reaching 5 percent, and other frontline states such as Estonia and Lithuania are not far behind it. Now the rest of Europe must follow suit.

But how should they finance the effort? With European economies stagnant and many Europeans struggling, governments are not keen to raise taxes or slash welfare spending. While such measures may ultimately be necessary nonetheless, the politically obvious solution for now is to borrow. This would make economic sense, too, since higher defence spending is, in fact, an investment in Europe’s future.

True, high government debts, EU fiscal rules, and domestic political constraints make increased borrowing tricky for many countries. But there are at least three options for mitigating these factors. The first is to exclude investment in defence from the bloc’s fiscal rules, which broadly limit government borrowing to 3 percent of GDP. Last year, the European Commission launched an ‘excessive deficit procedure’ against Poland, which rightly argued that its increased borrowing was necessary to protect the country—and the rest of Europe—from the heightened Russian threat.

Fortunately, European Commission President Ursula von der Leyen seems to have come around to the Polish position. She is proposing to activate the Stability and Growth Pact’s escape clause (which allows higher borrowing during crises) to permit increased defence investment. While Germany and other fiscally frugal countries have previously objected to granting such additional flexibility, that may change after the German elections on 23 February, given the country’s belated awareness of its vulnerability.

Since Germany itself has low public debt and a small budget deficit, EU fiscal rules would not prevent it from borrowing more to upgrade its feeble defences. But it is shackled by its own constitutional debt brake, which then-chancellor Angela Merkel introduced in 2009, and which the country’s powerful constitutional court aggressively enforces. Again, though, there could be greater openness to amending this measure after the election.

Fiscal rules are not the only constraint, however; so, too, are bond markets. France’s public debt already exceeds 110 percent of GDP, and its minority government has struggled to pass a budget that would trim its bulging budget deficit (6.1 percent of GDP). The country’s precarious political situation has further increased the premium that it must pay relative to German debt. Indeed, the interest rate on French debt briefly exceeded that of Greece last year.

A second option, then, is for European governments to borrow collectively to finance a one-off investment in defence capacity, as French President Emmanuel Macron has suggested. There is a precedent for this: the European Union’s €750 billion (US$782 billion) Covid-19 recovery fund. Another round of joint borrowing to the tune of €500 billion (3 percent of EU GDP) could amplify member states’ defence spending, help to rationalise European defence procurement, and potentially bolster European defence firms.

The hitch is that Hungarian Prime Minister Viktor Orban is openly pro-Putin, while four other EU countries (Austria, Ireland, Cyprus and Malta) have maintained their official neutrality vis-a-vis Russia. Moreover, fiscally frugal northern European countries have hitherto been reluctant to sanction further EU borrowing.

One potential workaround is for a coalition of willing governments to set up a special purpose vehicle separate from the EU, which could issue joint bonds backed by guarantees from participating governments. This would not only bypass recalcitrant EU members; it would also allow for participation by non-EU defence partners such as Norway and Britain. The relatively new British Labour government might find this especially attractive, given its own domestic fiscal constraints.

Finally, the third option is to expand the scope of European Investment Bank lending. While the EIB can already finance dual-use (civilian/military) projects, such as those producing drones and satellites, 19 EU governments recently suggested that it should also be permitted to finance wholly military spending, such as investments in tank and ammunition manufacturing.

However it is financed, Europe needs to rearm now. Upping defence spending to avert Ukraine’s defeat and deter broader Russian aggression is much less costly than fighting an all-out war. Otherwise, as Rutte warns, Europeans will need either to learn Russian or to move to New Zealand.

The EU’s year of fundamental choices

This year was always going to be important for the European Union, given the start of a new EU Commission mandate, a relatively new European Parliament and a change at the helm of the European Council. But recent developments—including the collapse of the German government, the beginning of coalition negotiations led by the far right in Austria, the end of Russian gas flows to the EU via Ukraine and Donald Trump’s victory in the US presidential election—have raised the stakes significantly.

Moreover, Europe confronts a volatile geopolitical environment. Beyond the grinding war in Ukraine, a violent reconfiguration is underway in the Middle East, exemplified by the collapse of dictator Bashar al-Assad’s regime in Syria and Israel’s military campaigns in Gaza, Lebanon and beyond. The Sahel, too, is gripped by upheaval, with countries such as Mali and Niger enduring military rule and intra-communal brutality. Nearby Sudan is in freefall, with widespread violence having led to economic collapse, mass displacement and an escalating humanitarian crisis.

All these developments demand responses from the EU. Among other things, it must recalibrate its approach to Africa, coordinating with allies to deliver support that addresses development, security and humanitarian imperatives. And it must provide increasing support to Ukraine, both to sustain the country’s resistance against Russia and to advance the Herculean reconstruction effort that is already underway.

Such efforts will be all the more important—and more complicated—with Trump in the White House. While it is impossible to say precisely what he will do once in office—his latest panic-inducing fixation seems to be taking control of Greenland—no one should count on the United States’ commitment to support its allies. On the contrary, Trump’s promise to end the war in Ukraine immediately upon taking office augurs capitulation to Russia, underscoring the need for increased EU aid for Ukraine and rapid strengthening of Europe’s defence capacity.

The EU knows well that it must take greater responsibility for its own security: the theme of Poland’s six-month EU Council presidency, which began on January 1, is ‘Security, Europe!’ But if this is to be more than a slogan, the EU will have to boost investment in research and development, pursue strategies to foster innovation and enhance collaboration among member states.

Such initiatives can also bolster EU efforts to tackle declining economic competitiveness at a time when aging populations are straining public budgets and impeding productivity growth in many countries. Stimulating investment in advanced sectors such as artificial intelligence, defence and green energy is essential, particularly given the additional economic strain on the EU implied by the import tariffs that Trump is threatening to introduce.

What the EU must not do is resort to indiscriminate protectionism—including against China. In fact, the EU needs a China strategy that prevents it from being swept into an all-encompassing confrontation and strikes a balance between maintaining mutually beneficial relations, preserving foundational alliances and defending the international order from attempts to destabilise it.

But external developments are just part of the challenge. Internally, Europe is grappling with widespread democratic erosion. While Hungary stands at the vanguard of this trend, it is hardly alone: even France and Germany—the traditional engines of EU integration—appear to be at risk of democratic backsliding. Trump crony Elon Musk is not helping matters, as he backs far-right parties like Alternative fur Deutschland.

There is also considerable disagreement among member states on a range of issues, from the trade deal with Mercosur, which was agreed in principle last month, to threat assessments regarding the Ukraine war. Whereas Poland remains adamant that the war must end with a return to the recognised borders, France is now urging Ukraine to engage in ‘realistic discussions on territorial issues.’ Meanwhile, Slovakia’s Kremlin-friendly prime minister is threatening to cut financial support for Ukrainian refugees in his country.

EU enlargement is another source of tension. Since Russia’s full-scale invasion of Ukraine in 2022, the EU has opened accession talks with Bosnia and Herzegovina, Moldova and Ukraine, and granted Georgia candidate-country status. But the hasty addition of new members would only undermine cohesion and compound decision-making inefficiencies. A clear, realistic methodology for accession based on objective criteria is badly needed, as is a sober assessment of whether each candidate can be integrated effectively into the EU’s structural framework.

In the meantime, practical measures and de facto agreements can deepen the EU’s ties with prospective member states and bolster their progress toward accession. Ukraine’s integration into the EU’s mobile-roaming network and trade agreements, and the synchronisation of its electricity grid with the Continental European Network, offer a useful model.

A final imperative for the EU in 2025 is to reform its institutional structures and decision-making processes. This must include a review of the ideologically-driven regulations contained in current legislation—the European Green Deal at the centre of Ursula von der Leyen’s first mandate is a prime example—and efforts to improve transparency, accountability and efficiency within European institutions, thereby enhancing their responsiveness and reliability. Fostering greater engagement with citizens through clear, open communication from Brussels, along with citizen-driven initiatives, would also help to strengthen the EU’s legitimacy and resilience. Progress on any of these fronts will require considerable political resolve from lawmakers in Brussels.

How the EU navigates this complex array of internal and external challenges over the next year will determine its future as a global actor. One hopes that pragmatism, unity and long-term thinking prevail in 2025.

Central and Eastern Europe’s bid for AI dominance

While the world’s attention remains focused on Ukraine’s heroic stand against Russian aggression, a quieter revolution is reshaping Central and Eastern European (CEE) economies.

CEE countries have emerged as vibrant innovation hubs in recent years, generating a wave of new tech unicorns. Romania’s UiPath, for example, has become an automation leader, enhancing workplace efficiency by freeing workers from repetitive tasks. Poland’s Docplanner is revolutionising health care access by leveraging artificial intelligence to connect millions of patients with doctors. And while Croatia’s Infobip, with its AI-enhanced communication platform, facilitates seamless interactions between businesses, governments and citizens, Bulgaria’s Payhawk is transforming corporate finance by streamlining expense management.

Together, these companies show that AI can be a powerful force for good, driving rapid advances in health care and finance and increasing workplace productivity. The next major tech innovation could well come from a startup incubator in Warsaw, a university lab in Bucharest, or a co-working space in Kyiv—probably developed at a fraction of Western costs.

Some might say that this wave of innovation is building despite the numerous challenges facing the region; others would say it is fuelled by them. As they strive to maintain their competitive edge in traditional sectors like auto manufacturing, CEE economies are also grappling with post-pandemic financial pressures, exacerbated by the European Union’s revised budget rules. Meanwhile, the war in Ukraine has introduced a new set of threats, from relentless Russian cyberattacks targeting supply chains and vital infrastructure to AI-assisted disinformation campaigns.

AI has the potential to help CEE countries tackle these complex challenges, generating tremendous value across traditional public sectors such as health care and education while enabling governments to counter foreign interference and safeguard critical energy networks.

Encouragingly, CEE countries have a strong foundation upon which to build a thriving tech sector, with a critical mass of engineers and STEM graduates. Company valuations in the region increased more than sevenfold between 2017 and 2022. Moreover, the share of investment from outside the EU rose from nine percent in 2022 to 21 percent in 2023, highlighting these economies’ growing global appeal.

To be sure, significant challenges remain. Notably, recent research shows that CEE economies still lag behind their Western European counterparts in both infrastructure and investment. With a population of more than 150 million and a combined GDP of nearly €2.5 trillion, the region has vast potential. Yet, total private-equity investment fell by 40 percent in 2023, to €1.7 billion. Consequently, launching a startup in the region can feel like trying to build a spaceship with spare parts from a bicycle shop.

The rise of populist parties poses another serious challenge, threatening to undermine responsible macroeconomic management and deter partners and investors. Instead of addressing fiscal pressures through spending cuts, many CEE governments have opted to raise corporate and value-added taxes, prioritising short-term relief over long-term economic stability.

A more forward-looking strategy would embrace AI’s transformative potential to drive economic growth and innovation across the region. To unlock this potential, CEE countries should take three key steps.

First, policymakers should focus on expanding STEM education and retaining top talent. The region’s main obstacle to becoming the next Silicon Valley is a shortage of skilled professionals. While hundreds of promising biotech, finance and robotics startups have emerged in recent years, they cannot grow—let alone become unicorns—without a robust talent pool. And, although education is a public good, the sluggish pace of reform in CEE countries means that the private sector must also focus on human-capital development.

Second, deeper European integration could fuel innovation by facilitating the cross-border exchange of ideas, talent and capital. With this in mind, the European Commission recently unveiled its AI Factories initiative, offering developers access to the computing power, data, and other resources needed to train advanced AI models. Several CEE countries have also started exploring structured technological partnerships with other European governments to promote shared strategic priorities.

Lastly, governments must boost inward foreign investment. Despite the geopolitical turmoil of the past two years and subsequent decline in private-equity inflows, the region has demonstrated remarkable resilience. While CEE economies are poised to play a pivotal role in Ukraine’s reconstruction, they must first address infrastructure gaps, funding shortfalls and regulatory uncertainty that could deter potential investors. Enhancing the region’s appeal is essential not only for the tech sector but also for advancing digital infrastructure projects, including 5G networks, data centres and quantum computing facilities.

As CEE economies confront these challenges, it has become abundantly clear that they must act swiftly to harness AI’s potential, or risk watching a generation of talent seek better opportunities elsewhere.

A Turkish brick in the BRICS bloc—is Turkey choosing between East and West?

Recent reports suggest that Turkey is positioning itself to join BRICS, the political-economic bloc founded by Brazil, Russia, India and China in the mid-2000s. Speculation that Turkey has made a formal application to join comes several months after Turkish Foreign Minister Hakan Fidan’s attendance at a BRICS summit in Russia. When Fidan met Vladamir Putin, the Russian president is said to have applauded Turkey’s increasing engagement with the bloc.

Accepting Turkey—a state with 85 million citizens and the world’s 19th largest economy—would add geopolitical heft to BRICS, which is actively looking to expand its membership and is often viewed as a counterweight to the Western-led G7.

These developments come at a time when Turkey’s strategic allegiances appear to be wavering. US-Turkey relations were recently at rock-bottom, and in the last year Turkish President Recep Tayyip Erdogan has threatened to ‘part ways’ with the EU and announced aspirations to permanent membership of the Shanghai Cooperation Organisation (SCO).

Some observers warn—somewhat extravagantly—that Turkey placing all its geopolitical eggs in the BRICS basket would be a step towards the collapse of the US-led world order. It has been a long-standing pastime for pundits to fret about Turkey’s strategic direction: in 2009, when Erdogan was deemed to have taken Iran’s side during nuclear negotiations, the first round of melodramatic ‘who lost Turkey?’ articles appeared.

Prior to this, Turkey’s westward inclinations were generally taken for granted. The Republic of Turkey’s founding president, Mustafa Kemal Atatürk, built a secular order and worked to establish what he saw as Turkey’s rightful place within Europe and the West. This came to fruition when, in 1952, Ankara accepted an offer to join NATO.

Half a century later, the Turkish foreign ministry sought closer relations with its Muslim neighbours at the direction of Erdogan, who has always asserted his Islamic identity, leading some to fear that Turkey’s secular politics might be quashed and its foreign policy derailed by Islamist sensibilities. Such fears proved largely overblown. Then-foreign minister Ahmet Davutoglu’s zero-problems-with-neighbours approach was as much guided by pragmatism as by ideology.

There is similar pragmatism in Ankara’s recent overtures to BRICS. As its economy developed in the first two decades of the 21st century, Turkey grew more confident on the international stage. It now has fewer qualms about pursuing a foreign policy that does not toe the line of its Western partners. Meanwhile, Ankara has grown increasingly frustrated with the lack of progress on its EU membership. Accession talks began in 2005 but have been moribund for some time.

European misgivings about admitting Turkey to the EU are not without foundation. A European Parliament report on Turkey published in 2023 set out a laundry list of concerns, including restrictions placed upon media, the opposition and the Kurdish population; deteriorating rights for women; a lack of judicial independence; and Ankara’s refusal to comply with European Court of Human Rights ruling.

BRICS offers Turkey a political-economic alternative to the EU, one that may prove more immediately welcoming. It can be assumed that Turkey’s accession to BRICS would face less stringent conditions. BRICS is neither a ‘Christian club’—an accusation Erdogan once levelled at the EU—nor is it likely to have quibbles over the human rights and rule of law violations in Turkey that are red flags for EU bureaucrats.

Turkey’s warming relationship with China is also significant. Turkey’s Ministry of Foreign Affairs highlights that trade with China has grown rapidly, such that the superpower is now its second biggest trade partner, with Ankara hoping to expand agricultural exports to Beijing. Turkey is also part of China’s Belt and Road Initiative, connecting it with several of its brethren Turkic Central Asian states, which are also members of the Shanghai Cooperation Organisation. Accordingly, seeking membership of BRICS and/or the Organisation makes sense to Turkish policymakers.

A Turkish scholar has pointed out that, as the global centre of geopolitical gravity shifts from the western hemisphere to the Indo-Pacific, Turkey may well be losing strategic leverage: its oft-touted status as a bridge between East and West. Here, again, joining BRICS will afford Ankara benefits, enmeshing it in an emerging bloc that straddles regions and connects burgeoning economies.

Of course, Turkey’s accession to BRICS is not a given—all current members must approve its application. But even if it does join, this should not be regarded as a repudiation of the West. Erdogan recently remarked that Turkey will not be forced into choosing between Europe or the SCO, but could maintain relations and cooperate with both. A parallel may be drawn here with India, which is a founding member of BRICS and a full member of the SCO, but also a member of the Quad with the US, Japan and Australia.

Ultimately, Western policymakers should not view Turkey’s geopolitical leanings as a zero-sum game. Jarring as it may be to some observers, a Turkey ensconced in BRICS has the opportunity to reprise its role as a bridge—not between continents but between geopolitical blocs.

What Australia can learn from Europe in addressing hybrid threats

Europe is well ahead of Australia in its understanding of hybrid threats—harmful tactics below the threshold of war. Australia views these acts as isolated attacks across diplomatic, military, economic and technological domains, whereas European governments see them as part of a cohesive strategy aimed at undermining the defence capabilities of the target country and its partners.

Australia’s fragmented perspective poses a challenge because, by the time hybrid threats escalate into conflict, it may be too late to develop the necessary coordinated defences.

To be better prepared, Australia must widen its focus beyond government and facilitate collaboration among domestic stakeholders and external partners. It must also gather both civilian and military resources that enable a proactive response to hybrid campaigns.

It is understandable that European countries are bolstering their capacity to deter and defend against hybrid threats, given the war in Ukraine on their continent. Russia’s efforts to disrupt European support for Ukraine stop short of direct military conflict. Instead, Russia is undermining regional security through information manipulation, cyber attacks, economic coercion, instrumentalisation of migrants and sabotage—all tactics central to hybrid warfare.

There are indications that Moscow orchestrated arson attacks in Riga in February, London in March and Warsaw in May and attempted to set off explosions mid-year in Germany, France and Czechia. This fits Russia’s broader strategy of using proxies to test Western defences, together with disinformation campaigns, cyber attacks and espionage. Attacks on European infrastructure doubled from the last quarter of 2023 to the first quarter of 2024.

This enables a comprehensive security approach in which the state’s vital functions are secured through collaboration among authorities, citizens and business communities. Examples include: Finland’s efforts to improve national and regional situational awareness by establishing the Hybrid Centre of Excellence (an international hub of experts on hybrid threats) and intensifying joint training; France empowering its media watchdog to fight destabilisation attempts by TV channels controlled by foreign states; and Britain tasking its 77th Brigade, a unit combining regulars and reservists with specialist skills to combat new forms of warfare, to use non-lethal engagement and legitimate non-military levers as a means to counter malicious behaviour.

Regionally, the EU issued a Joint Framework on Countering Hybrid Threats in 2016, which provides guidelines for member states to identify and respond to hybrid threats, including a protocol playbook. This framework supports closer coordination with NATO and secondment of personnel to the Hybrid Centre of Excellence to facilitate research, training and information sharing among EU and NATO states. In 2022, the European Union formulated the EU Hybrid Toolbox (EUHT) to gather all civilian and military instruments that can counter hybrid threats. The EUHT brings together key response mechanisms such as the Foreign Information Manipulation and Interference toolbox and the Cyber Diplomacy Toolbox. More than 200 additional tools and multifaceted measures will be further explored.

Europe’s robust approach to hybrid threats raised awareness of Russian disinformation operations that sought to influence the June 2024 European Parliament election. The influence campaigns, conducted via social media accounts and fake doppelganger websites, targeted at least seven European countries, sharing inaccurate claims, misinterpretations of policy and inflammatory political ads. These campaigns had a significant impact, especially in Poland and the Baltic states, encouraging anti-government protests and inciting inter-ethnic hatred. It was assessed by Euractiv that these influence campaigns helped far-right parties’ win big in the 2024 EU election.

Influence networks also targeted elections held a few weeks later to elect members of the French National Assembly. They framed the Assessment of the campaign by Insikt Group recorded minimal public engagement, although the National Rally won the highest votes in the first round. The second round was similarly targeted by disinformation operations. Since February, the French government has been accusing Russia of operating online manipulation campaigns against countries backing Ukraine, including making a website that mimicked the French Foreign Ministry. France has asked Brussels to impose sanctions against disinformation actors in Europe and beyond.

At the EU level, the European External Action Service plays a crucial role in coordinating the response to hybrid threats, working closely with NATO and other multilateral organisations. So far, the EU has enacted sanctions against entities and individuals involved in hybrid operations against its members, to punish and deter actors with a longer aim to protect democratic institutions, maintain stability and ensure citizens’ security. In May, the EU began to establish Hybrid Rapid Response Teams to assist member states and partner countries countering hybrid threat campaigns by providing assessment, recommended actions and resources.

Australia can draw valuable lessons from Europe’s highly coordinated approach to incorporate civil preparedness, educate the wider public and work closely with international partners. The current Australian approach to hybrid threats involves various policies each managed by specific government departments and units. This poses challenges when it comes to working with action directed by other countries against hybrid threats.

For example, the Security of Critical Infrastructure Act 2018 provides a regulatory framework for managing risks to critical infrastructure, overseen by the Cyber and Infrastructure Security Centre under the Department of Home Affairs. The Foreign Influence Transparency Scheme Act 2018, implemented by the Attorney-General’s Department, enhances transparency regarding foreign influence on governmental processes. The Electoral Integrity Act 2018 includes measures to combat disinformation and foreign interference, with a taskforce chaired by the Australian Electoral Commission.

A Counter Foreign Interference Coordination Centre was established in 2018 under the Department of Home Affairs to counter foreign powers interfering within Australia. Meanwhile, the Espionage and Foreign Interference Act 2018 is implemented by the Australian Security Intelligence Organisation, which works with the Australian Federal Police and other government bodies in the Counter Foreign Interference (CFI) Taskforce. Additionally, in 2019, the University Foreign Interference Taskforce was established to develop protection guidelines addressing interference in education and research.

However, questions remain about how Australia can address hybrid operations originating from outside its territory. Examples include foreign influences in 2022 in Pacific Island countries that framed Australia as colonialist and belligerent, as well as obstruction of trade in retaliation against inquiries into the origin of Covid-19. Internationally, Australia’s Department of Foreign Affairs and Trade has undertaken bilateral and mini-lateral cooperation to counter hybrid threats. However, aside from the 2023 Joint Declaration Against Trade-Related Economic Coercion and Non-Market Policies and Practices issued with Canada, Japan, New Zealand, Britain and the United States, little public information is available on how Australia is addressing economic coercion.

To avoid being caught off guard by hybrid threats, Australia needs to adopt a more cohesive policy approach and facilitate collaboration among domestic stakeholders and external partners such as the Quad, AUKUS, Five Eyes, Five Power Defence Arrangements, NATO and ASEAN.

Australia must also gather both civilian and military resources to counter hybrid campaigns proactively and It should establish a central organisation that facilitates research, training and information-sharing among government departments, private sector entities and international allies, akin to Europe’s Hybrid Centre of Excellence. This central organisation should foster dialogue among stakeholders and offer capacity building for relevant partners. Such information-sharing is key to strategic warning and building situational awareness on hybrid threats.

Additionally, Australia needs to step up as a leader in addressing hybrid threats in the Indo-Pacific region, an area increasingly targeted by malicious actors employing hybrid tactics. Other countries in the region, including the Philippines, Vietnam, Japan and South Korea, have been experiencing hybrid attacks without knowing how to address them. By taking a proactive role, Australia can support its partners and help maintain regional stability when dealing with points of contention in the Taiwan Strait, the South China Sea, the East China Sea and on the Korean peninsula.

Why young Europeans are embracing the far right

Progressives have long counted on young people to champion their causes. Just five years ago, young Europeans voted for parties advocating climate action, social justice, and democratic reform.

But this may no longer be a viable political strategy. June’s European Parliament elections showed that many young voters have shifted to the far right, enabling Eurosceptic, anti-immigrant and anti-establishment parties to make significant gains.

This trend is not confined to Europe. Young Kenyans protesting against new taxes stormed parliament this month, and several were killed when the police opened fire. Around the world, a new youth politics is emerging. While not always aligned with the far right, this movement is often anti-status quo, serving as a powerful warning to politicians about the need to reconsider both their message and their medium in appealing to disaffected young voters.

These voters’ rightward shift is apparent across the European Union. After the overwhelming youth support for the Greens in 2019, 16 percent of German voters under 25 voted for the far-right Alternative for Germany (AfD) in this year’s European elections, putting the party in second place behind the centre-right Christian Democrats and well ahead of Chancellor Olaf Scholz’s Social Democrats. In France, 30 percent of the youth vote went to Marine Le Pen’s far-right National Rally. This outcome was in line with the 2022 presidential election run-off, when Le Pen won 39 percent of voters aged 18 to 24 and 49 percent of those aged 25 to 34.

Meanwhile, 21 percent of Italian voters aged 18 to 34 helped Prime Minister Giorgia Meloni’s Brothers of Italy win a strong mandate to pursue its agenda. In Spain, the ultra-conservative Vox party increased its share of the youngest voters (under 25) to 12.4 percent. By contrast, the far-right Sweden Democrats came in fourth, despite winning 10 percent of voters aged 22 to 30.

Europe’s swing to the right has led many politicians to harden their positions on such issues as immigration. But young voters’ growing support for xenophobic, anti-EU, and ultra-conservative parties is driven less by anti-immigrant sentiment than by a powerful sense of betrayal by establishment politicians. As older generations, who have lived economically secure lives, consume a growing share of government budgets through generous pensions and health care, young Europeans grapple with a cost-of-living crisis and dwindling economic prospects.

This growing frustration can be partly attributed to EU politicians’ failure to ensure stable, well-paid jobs for young people. Youth unemployment among Europeans aged 15 to 24 reached 13.8 percent in 2023. In Spain, the rate was 27.9 percent, compared with 27.7 percent in Greece, 20.7 percent in Italy, and 18.9 percent in Sweden.

To be sure, there has been some progress in addressing the problem. Youth unemployment in France declined from 25 percent in 2016 to 15.7 percent in 2023; in Italy, it fell from 42.7 percent in 2014 to 22.8 percent in 2024; in the Netherlands, it decreased from 13.2 percent  in 2013 to 8.7 percent in 2023; and in Germany, it dropped from 15.5 percent to 6 percent between 2005 and 2023. Even so, support for the far right has increased across the bloc amid growing evidence that no matter how hard they work, most young people will end up poorer than their parents.

The problem extends beyond the labour market. In many European countries, young people are also navigating a housing crisis, overcrowded classrooms, and struggling health-care systems. In the face of rising rents, exorbitant tuition fees and stagnant real wages, young voters are increasingly asking themselves who will address their concerns. Far-right politicians, while wrongly blaming immigration, at least recognise that there is a problem, and they are doing so in ways that resonate with younger voters.

Social media is a prime example. In the 1960s, media theorist Marshall McLuhan highlighted the importance of how messages were communicated, not just what was being said. The medium through which people communicate, he argued, shaped their interactions. His famous observation that “the medium is the message” is even more pertinent in the age of platforms like TikTok, which enable far-right demagogues to tailor their messaging to young people.

What veteran politicians who mistake social media for a broadcast medium fail to understand is that it can be a powerful tool for fostering engagement, bonding and identity formation. But politicians who view social media as a round-the-clock focus group, shaping their policies according to voters’ whims and immediate reactions, are just as dangerous as those who ignore it entirely.

By fuelling shared grievances, social media can help political movements expand and rally supporters. For example, while Scholz belatedly joined TikTok in April, the German far right has used the platform to create a powerful narrative—some might say an alternative universe—that speaks to young voters’ fears and anxieties. Consequently, many EU policymakers feel increasingly isolated as they try to do their jobs while online groups mobilise against them.

As a generation of young voters spends much of its time on such platforms as YouTube, TikTok and Instagram—in the United States, teens spend an average of 4.8 hours per day on social media—the result could be a toxic political cocktail. To win back disaffected young people, political leaders must offer them a future they can believe in and embrace the media platforms where young people live.

The dangerous retreat into protectionism

Trade barriers, tariffs and other protectionist tools are starting to feature more prominently around the world, often appearing under the heading of economic security. The decision by President Joe Biden’s administration this month to quadruple US tariffs on Chinese electric vehicles to 100 percent, as well as doubling the tariff on solar cells (to 50 percent) and more than tripling the tariff on lithium-ion EV batteries (to 25 percent), represents a momentous new step in this direction.

Until now, US restrictions on trade with China had been justified on national-security grounds, to prevent the Chinese military from acquiring sensitive technologies. While one could debate whether this policy made sense, it at least seemed to fit into a longer-term strategy. But these latest protectionist measures have nothing to do with China’s military capabilities. Instead, they aim solely to prevent cheaper, often better, green technologies from reaching US consumers.

The connection to the US election is obvious. Biden has been trying to head off Donald Trump by playing to the same protectionist sentiments that Trump, the presumptive Republican nominee, has been stoking for years. It was Trump, after all, who put the world on a new protectionist path when he imposed sweeping tariffs on steel, aluminium and many imports from China. Keen not to be outdone by Biden, he has already said that he would double the tariff on Chinese EVs from Mexico and apply additional ones to an even wider range of products.

Even taken in isolation, such measures are expensive and counterproductive. Tariffs impose higher costs on consumers and reduce competitive pressures, and thus innovation. In this case, they will also impede the transition to a net-zero-emissions economy. There are no economically redeeming features to the policy. Worse, the latest round of protectionist measures is part of an increasingly disturbing and dangerous trend. Step by step, major powers are unravelling an international economic order that delivered enormous gains over many decades through trade integration and globalisation.

These were hard-won gains. The first great wave of globalisation ended with World War I and was followed by trade wars and deep depressions throughout the interwar period. Although trade integration resumed after World War II, facilitating the reconstruction of Western Europe and Japan, its scope remained limited. It was not until the late 1980s and early 1990s that the next great wave of globalisation began, with global trade finally returning to its pre-1914 levels.

The rapid expansion of trade and investment flows over the next three decades would prove spectacularly successful across practically every macroeconomic metric. Roughly one-third of everything that has ever been produced was produced during this period, leading to the rise of a new global middle class. Poverty was dramatically reduced and the gap between rich and poor countries started to close for the first time since the start of the Industrial Revolution.

But over the past decade or so, debates about trade have changed. The new emphasis is on economic security, derisking and supporting domestic industries through massive industrial-policy subsidies. We seem to be going backwards, raising the risk of a return to the trade wars of earlier, darker times.

The International Monetary Fund and the World Trade Organization have both published extensive studies showing that deeper economic fragmentation would reduce global GDP by 5 to 7 percent, with a disproportionately large share of the burden falling on less developed countries. These are huge figures with huge consequences. The Sustainable Development Agenda that United Nations member states champion every year will become more of a grandiose dream than a practical objective. In the absence of a growing, still-integrating global economy, most of the 17 goals will become more difficult, if not impossible, to achieve.

One can easily imagine a better, more sensible scenario in which the United States returns to defending the rules-based global economic order, China rebuilds its credibility by adhering to the rules of the game, and the European Union lives up to its ambition to be a global champion of free trade. In doing so, each would advance its own interests, as well as benefiting the rest of the world.

Yet the trend is moving in the other direction. While Biden and Trump vie to establish their protectionist bona fides, Europe, too, has started to regard Chinese EVs as a threat, rather than as an opportunity to accelerate its green transition. Add to this China’s own talk about creating a self-sufficient ‘dual circulation’ economy, and India’s ongoing subsidies and resistance to trade, and you have the makings of a more radically fragmented global economy.

With these major powers rejecting the principles and policies that previously brought unprecedented economic gains, one must hope that policymakers everywhere will have the courage to step back and consider the bigger picture. History shows what we are risking by throwing globalisation into reverse. We must not go down that path again.

Tag Archive for: European Union

Europe steps up, with Constanze Stelzenmüller

Constanze Stelzenmüller, expert on German, European, and trans-Atlantic foreign and security policy and strategy at the Brookings Institution, gives Stop the World her short take on the remarkable sense of urgency that Europe is displaying in building its own security capabilities: “I’ve never seen anything like this in my life.”

Her longer answer is a superb dissection of the radical reorientation coming out of the Trump administration—what she calls a “Yalta 2.0”; the likelihood that much of the world might have other ideas, leading a frustration of Trump’s instincts; Europe’s shortening patience for the skulduggery of Hungary’s Viktor Orbán; its need to keep the US engaged in Europe’s security; and ultimately the proper sense that Europe has accepted the need to step up to defend Ukraine and itself over the longer term.

Her conclusion: “I think we might all have to sort of buckle our seat belts.”

Stop the World: Why Ukraine matters to the Indo-Pacific

Today on Stop the World, the conversation on Ukraine continues, with ASPI’s Alex Bristow speaking to Jakub Zajączkowski and Saroj Kumar Aryal from the University of Warsaw. They discuss the EU and US approaches to peace in Ukraine, the security guarantees Ukraine needs, and the links between the Indo-Pacific and Euro-Atlantic, including through NATO and the Indo-Pacific Four.

They discuss Poland’s increased interest in the Indo-Pacific, the value of minilaterals such as the Quad, and India’s relationships with Russia, Europe and Quad countries.

Guests:
Alex Bristow
Jakub Zajączkowski
Saroj Kumar Aryal

Stop the World: It’s all about economic security with the EU’s Maria Martin-Prat

This week on Stop the World, we were pleased to host EU Deputy Director-General for Trade and Economic Security, Maria Martin-Prat. Interviewed by ASPI’s David Wroe, they discuss how the EU is managing economic security, Australia and Lithuania’s experience of economic coercion by China and, of course, the latest developments in tariffs. 

This episode was recorded on 11 February, 2025.

Guests:
David Wroe

Maria Martin-Prat

Stop the World: Securing democracy: countering disinformation in 2024

This week’s episode of Stop the World comes to you from Brussels, where ASPI’s Executive Director Justin Bassi interviewed the Head of Strategic Communications at the European External Action Service Lutz Güllner.

The conversation explored disinformation, foreign influence, manipulation and interference, with Justin and Lutz discussing the importance of countering state backed disinformation and foreign influence campaigns, how these tactics can affect the resilience of open societies, and what can be done to deter them.

With elections due to take place in the European Union (EU), the United States and the United Kingdom in 2024, they also discussed concerns around election interference, the types of campaigns that foreign actors are undertaking in an attempt to manipulate them, and how the EU can work with Indo-Pacific countries to counter these threats.

Guests:

⁠Justin Bassi⁠

⁠Lutz Güllner

Stop the World: EU security and strategic stability in the Indo-Pacific

This week on Stop the World, ASPI Senior Analyst Alex Bristow speaks to Niclas Kvarnström, Managing Director for Asia and the Pacific at the European ExternalAction Service, to discuss the European Union’s engagement in and relationship with the Indo-Pacific.

With war in Europe and conflict in the Middle East, they discuss how much capacity the European Union (EU) has to focus on the Indo-Pacific, how Russia’s war on Ukraine has forced a rethink of the EU’s future security, as well as its relationship with China.

And in the episode’s second segment, Alex is joined by William Leben, Expert Associate at the Australian National University’s National Security College, to unpack his recent ASPI report ‘Escalation risks in the Indo-Pacific: a review for practitioners’. They discuss the main threats to strategic stability in the Indo-Pacific, how a potential crisis in the region might develop, and whether or not AUKUS will contribute to a balance of power in the region.

Mentioned in this episode:

⁠https://www.aspi.org.au/report/escalation-risks-indo-pacific-review-practitioners#:~:text=The%20outbreak%20of%20war%20in,potential%20miscalculations%20heighten%20the%20risk⁠.

Guests:

⁠Alex Bristow⁠

Niclas Kvarnström

⁠William Leben