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President Trump’s economic policy has disrupted global trade by imposing high tariffs and generating sustained uncertainty for partners. The European Union is among the most exposed actors. To assess its strategic options, this policy note interprets this trade policy as an interactive reform process rather than a coherent economic doctrine.

That tariff policy follows a non-linear pattern, characterised by abrupt shifts, shifting coalitions of domestic winners, and limited reliance on institutional expertise. Rather than reflecting a stable economic strategy, tariffs function as a tool of political realignment and bargaining leverage. This dynamic creates persistent analytical uncertainty, complicating the response of allies and markets.

By following a reform-process approach, the note identifies the political logic, distributional effects, and structural weaknesses of the tariff strategy. Understanding these features will help assess and inform the EU’s policymaking strategy and frame the broader policy discourse in an unstable trade order.

Read here in pdf the Policy paper by Angelos Karayannopoulos, Junior Research Fellow, ELIAMEP.

Introduction

Emanating from this uncertain landscape, policies associated with “Trump Tariffs” have been challenging to analyse, as they represent a rather ongoing process.

The Trump Administration 2.0 trade policy has been defined by uncertainty. Uncertainty was first generated in the first months of the Administration by the unprecedented shift in the global economic order, adopting a protectionist-leaning trade policy that questioned the very foundations of the world trade system. Along the way, uncertainty was fuelled by repeated, often contradictory announcements, delays in implementing decisions, revisions, ongoing negotiations, and relapses in escalations of aggression vis-à-vis trade partners and competitors. Emanating from this uncertain landscape, policies associated with “Trump Tariffs” have been challenging to analyse, as they represent a rather ongoing process.

Several studies have tried to estimate the economic implications. According to modelling by Yale’s Budget Lab, the tariffs implemented through October 2025 are projected to result in a short-term increase in consumer prices of approximately 1.3%. Furthermore, it is anticipated that annual GDP growth will decrease by approximately 0.5% between 2025 and 2026. The impact of these tariffs varies across sectors, with prices for clothing, leather goods, and metals rising by 28% to 40%. In the long term, the economy is forecast to be approximately 0.4% smaller, equivalent to about $125 billion annually. By the end of 2025, unemployment is expected to increase by 0.3 percentage points, with a further 0.7 percentage point increase by 2026.

Figure 1: U.S Average Effective Tariff Rate Since January 1, 2025

Source: The Budget LabSource: The Budget Lab analysis. Created with Datawrapper

Although this process appears to have entered by October 2025 a more structured phase, where actors involved already expect at least minimum consequences from the new era of US-led trade protectionism, it is necessary to put this process into a frame in which we can better analyse the associated consequences and response strategies from actors directly affected. Regarding the EU, the European Commission had initially drafted a €26 billion counter-tariff package but froze it amid a temporary 90-day truce announced by Washington. The “Turnberry deal” that followed capped US tariffs on most European exports at 15 per cent, half of what had been threatened, but kept the 50 per cent duties on steel and aluminium firmly in place. Brussels framed the compromise as “the best possible under the circumstances”, though few viewed it as a victory. France’s then Prime Minister called it “a dark day for transatlantic trade”, while Germany and Italy quietly accepted it as damage control. The asymmetry of the arrangement, Europe cautious, Washington defiant, seems to reflect a broader strategy within Trump’s circle, which leverages uncertainty and unpredictability.

Equally salient is the tariff regime’s standing under the World Trade Organisation (WTO). Several measures are plainly inconsistent with US obligations under WTO rules, and that institutional mismatch matters for two reasons. First, it signals to other actors that rules can be subordinated to unilateral leverage, thereby amplifying global uncertainty. Second, it also opens a parallel front of response, allowing partners to challenge the policy through WTO litigation, to coordinate pressure via new coalitions, or even to pursue alternative rule-making outside the traditional multilateral framework.

By breaking from previous tariff norms, the US signals both a shift in bargaining strategy and an intention to reshape the underlying logic of global trade engagement.

So while many viewed the Turnberry deal as a setback for Europe, its more profound significance is that it represents a fundamental rupture in the post-war global economic order, one whose elements remain blurry and purpose ambiguous. This rupture challenges the post-1945 framework of multilateral trade rules, embedded reciprocity, and predictable dispute-resolution mechanisms that have historically underpinned transatlantic commerce and investment flows. By breaking from previous tariff norms, the US signals both a shift in bargaining strategy and an intention to reshape the underlying logic of global trade engagement.

Understanding this rupture and its purpose, however, first requires taking a step back: how did this policy come about in the first place? Who supports this policy, whose interests are at stake? How, then, is this reform of the fundamental trade dogmas evolving, and what lessons can friends and foes acquire from this process? Answering these questions is critical because reforms of this magnitude cannot be assessed solely through economic metrics; they are embedded in complex political dynamics, institutional constraints, and the distributional consequences that define domestic and international legitimacy. It is not easy to assess both the US emerging context and the EU’s response strategy without first answering these fundamental questions. Failing to identify actors, coalitions, and underlying motivations risks misinterpreting both the policy’s logic and its potential outcomes.

It is thus crucial to frame the new tariff policy within a reform-process approach, assessing not only the policy instruments themselves but also how they were conceived, communicated, and implemented. Viewing the policy in this way allows for a nuanced understanding of how reforms evolve under uncertainty.

Reform Assessment 

Characteristics 

Like taxes, tariffs redistribute economic resources across sectors, firms, and households, creating both beneficiaries and those who bear direct or indirect costs. […] Its success thus depends not only on technical design but also on credible leadership and public trust.

Changes in tariffs resemble tax reforms, and tax reforms are “inherently difficult and a politically charged process”[1]. Like taxes, tariffs redistribute economic resources across sectors, firms, and households, creating both beneficiaries and those who bear direct or indirect costs. They are not neutral interventions; instead, they restructure incentives, alter market signals, and can produce knock-on effects across supply chains and consumer prices. This kind of reform encounters resistance from entrenched interests, including both domestic producers and import-dependent industries, which may lobby vigorously to protect their positions. Its success thus depends not only on technical design but also on credible leadership and public trust. In the US, where trust in public institutions stands at around 34% (OECD, 2024), this creates an additional obstacle: low confidence in governance amplifies scepticism, encourages political polarisation, and increases the likelihood of compliance gaps or public backlash. Consequently, any attempt to impose fundamental tariff reforms must begin with precise attention to both policy design and the clarity of its stated purpose. Clear objectives are essential to overcoming institutional friction and aligning stakeholders around a shared understanding of the reform’s objectives.

Donald Trump’s electoral victory in November 2024 reshaped the political landscape, creating the conditions for a new wave of policy experimentation. Among these, tariff reform emerged through a “window of opportunity”[2] in which public dissatisfaction with globalisation (problem), protectionist ideas (policy), and a nationalist political climate (politics) converged.

Donald Trump’s electoral victory in November 2024 reshaped the political landscape, creating the conditions for a new wave of policy experimentation. Among these, tariff reform emerged through a “window of opportunity”[2] in which public dissatisfaction with globalisation (problem), protectionist ideas (policy), and a nationalist political climate (politics) converged[3]. These “windows” are critical junctures in reform theory, representing periods when political, societal, and economic conditions align to allow for initiatives that entrenched interests might otherwise block. Trump, acting as a “policy entrepreneur”, seized this moment with a symbolic solution of high political appeal but low economic coherence, illustrating how political incentives often outweigh technocratic rationality in such contexts. Policy entrepreneurs are actors who mobilise attention and resources to attach specific policy ideas to these moments, shaping both the content and timing of reforms in ways that resonate with their political base. Such reforms rarely succeed. Trump Tariffs, too, seem unlikely to achieve the economic goals the Administration attaches to them in the short- to medium-term. Still, they serve as a strategic move to generate negotiation leverage. 

Figure 2: Trump’s Window of Opportunity

 

 Source: Author’s illustration, based on Kingdon (1984) and Aberbach & Christensen (2014).

 

The reform’s uncertainty stems from a lack of a coherent strategy understood by both experts and the actors involved. Uncertainty in this context arises from both the ambiguity of stated goals and the erratic sequencing of policy measures, leaving stakeholders unable to anticipate outcomes or plan accordingly. In his political economy framework, Rodrik (1993) emphasises that “identifying who benefits and who bears the costs is essential while assessing a reform”[4]. Without this mapping, policymaking risks misallocating support, generating opposition, and undermining credibility. For tariffs, this translates into narrow, fragmented domestic coalitions: producers of protected goods may celebrate immediate gains, while consumers, downstream industries, and exporters face hidden or delayed costs. When this distribution is unclear, reforms are often blocked, diluted, or derailed entirely, as competing interests contest both the measure’s legitimacy and its impact.

Trump’s policy design and objectives appear less economic than political, aimed at creating leverage in international trade negotiations and consolidating support from key domestic actors.

Furthermore, economists tend to attribute deviations from efficiency to vague “political motives”[5], thus overlooking the complex political dynamics that actually shape reform adoption and durability. In this case, however, Trump’s policy design and objectives appear less economic than political, aimed at creating leverage in international trade negotiations and consolidating support from key domestic actors. In other words, tariffs act less as calibrated economic instruments and more as signals to allies, competitors, and the domestic base, serving as a deliberate policy to structure perceptions and incentives rather than to correct market failures.

…“bring back manufacturing” can therefore gain traction not because it resolves a clearly defined economic problem, but because it fits a political narrative, is available at the right moment, and mobilises relevant constituencies.

These characteristics reflect what Aberbach and Christensen (2014) describe as a “high-ambiguity reform model”, often referred to in the academic literature as the “garbage-can” model of policymaking. The term is not normative but technical, denoting decision-making processes in which problems, solutions, and political attention move in parallel rather than sequentially. In such environments, solutions are often pre-packaged, and policy choices emerge when these elements temporarily coincide. A measure such as “bring back manufacturing” can therefore gain traction not because it resolves a clearly defined economic problem, but because it fits a political narrative, is available at the right moment, and mobilises relevant constituencies. This places the reform closer to a symbolic or narrative-driven act than a carefully calibrated economic intervention. Tariffs, in this sense, function performatively, shaping public discourse, signalling resolve internationally, and activating domestic coalitions even when their economic effects remain uncertain.

Altogether, the US Administration appears to clearly follow a highly “interactive model” of reform, in which policies evolve during implementation and are prone to being shaped by reactions from key stakeholders[6]. And this is a key understanding for friends and foes: in this interactive framework, policymaking is iterative rather than linear. This means that initial designs are adjusted in response to feedback from markets, industry lobbies, unions, or foreign governments. Here, the stated goals are vague but politically salient: restore domestic manufacturing, reduce trade deficits, decouple from China, and negotiate better deals with strategic partners. However, consistent with interactive models, implementation has been non-linear, marked by continuous redefinition, resistance, and episodes of market turbulence. Internationally, such unpredictability pressures partners to return to the negotiating table, potentially increasing the US’s bargaining power, as observed in engagements with the EU, among others. Domestically, however, outcomes are uneven. The interactive process produces winners and losers who may not align neatly along predictable lines, leaving policy outcomes contingent on power, influence, and negotiation skill. Who, then, are the key actors shaping this interactive process? Understanding their networks, incentives, and access to the administration is critical to forecasting the trajectory of Trump’s trade policy.

Actors and coalitions

Tariffs activated interest groups according to their economic and political leverage. Table 1 outlines the key leading actors and stakeholders in this process, illustrating their positions and the tensions that define the interactive model.

But who actually holds influence over the President? To understand the political motivations behind this reform, it is necessary to identify and monitor the coalition driving it.

Table 1: Key Actors and Coalitions Overview

Category Group/Actor Interest/Position Relevance Winners Certain US manufacturers (e.g., steel, aluminium) Support protectionist policies to reduce foreign competition Gain temporary market advantage; politically vocal Certain labour unions (e.g., UAW) Tentative support; hope to preserve jobs in targeted sectors Provide political legitimacy to tariffs Losers Consumers Face higher prices and a reduced variety of goods Broad-based economic impact, especially on low-income groups Retailers (e.g., Walmart, Amazon) Disrupted supply chains; higher costs Large employers and lobbyists are against tariffs Automotive industry (e.g., Ford, GM) Costlier production due to tariffs on parts Influence industrial policy and public debate Farmers Victims of retaliatory tariffs on exports Politically sensitive group Key Stakeholders Financial Sector (e.g., investment banks, Wall Street) Oppose trade instability; favour predictability and open markets Indirect but consequential influence through market reactions and lobbying E-commerce platforms (e.g., Shein, Temu) Affected by the de minimis rule changes Pushback through lobbying and legal channels US government/trade agencies Set and enforce tariff policy Shape the direction of the protectionist agenda

In theory, competing coalitions shape reform by leveraging resources and legitimacy to promote solutions and influence institutional arenas[7]. In this case, traditional pro-trade voices, such as consumer groups, major retailers, and the automotive industry, have been sidelined. Instead, a new “design coalition”[8] has emerged, uniting protectionist advisors, domestic steel and aluminium manufacturers, and labour unions like the United Auto Workers. This coalition strategically framed the tariffs as a patriotic move to revive American manufacturing, aligning with Trump’s agenda. Their ability to displace established advisory bodies and bypass expert consultation equally reflects the shift toward the interactive model, one that rewards salience, symbolism, and strategic positioning over traditional deliberation. Yet, it does not guarantee success.

At the centre of Trump’s new trade coalition stands Peter Navarro, reinstated as Senior Counsellor for Trade and Manufacturing. Navarro functions less as a bureaucrat than as a strategic ideologue. His framing of “reciprocal tariffs” as a question of fairness rather than efficiency has again struck a chord with the president. In practice, Navarro supplies both the conceptual blueprint and the political language of protectionism. His constant proximity to Trump, through Oval Office briefings and media coordination, gives him unparalleled access and agenda-setting power.

Around him operates a small circle of ideologues, including Miran, whose recent work provides the intellectual scaffolding for the new tariff rationale. In his paper “A User’s Guide to Restructuring the Global Trading System” in November 2024, Miran outlined a comprehensive plan to redesign global trade rules. His approach treats tariffs not as fiscal tools but as instruments of structural correction, meant to revive America’s industrial capacity, which he argues has been hollowed out by decades of asymmetric globalisation. At the core of his diagnosis lies a perceived distortion in the international monetary order: the US dollar’s reserve status, while conferring global privilege, simultaneously undermines US competitiveness by sustaining an overvalued currency. The outcome, in his view, is a chronic trade imbalance that erodes manufacturing and widens socio-economic divides in America’s industrial heartlands.

It is worth noting, however, that Miran’s blueprint ends with a sober caveat, stating that “[t]here is a path by which the Trump Administration can reconfigure the global trading and financial systems to America’s benefit, but it is narrow, and will require careful planning, precise execution, and attention to steps to minimise adverse consequences. This disclaimer matters because the administration’s rollout shows the opposite mix, and the mismatch between a disciplined intellectual roadmap and ad hoc managerial practice helps explain why a fragile path to systemic change has, so far, become a broad avenue of organisational failure.

Going back to the actors behind the new tariff regime, implementation largely falls to Howard Lutnick, the new Secretary of Commerce. A financier by background, Lutnick serves as the operational pillar of the administration’s trade structure. Once Navarro’s concepts gain presidential approval, they are translated into policy through the Commerce Department. Lutnick oversees the tariff schedule, exemption mechanisms, and enforcement procedures. He also maintains regular contact with industrial lobbies, particularly in autos, steel, and energy, to apply pressure and align protectionist measures with domestic business interests. Less ideological than Navarro but equally loyal to Trump, Lutnick’s strength lies in execution. His role ensures that ideology becomes administrative and that campaign slogans become regulatory instruments.

Bridging these two spheres is Jamieson Greer, the US Trade Representative (USTR). A veteran of the first Trump administration, Greer now serves as the system’s legal and diplomatic interface. His office formalises tariff actions in more proper language, manages negotiations, and integrates political objectives into trade agreements. In the July 2025 deal with the EU, Greer coordinated the partial rollback of auto tariffs in exchange for European concessions on LNG imports and investment flows.

Navarro dominates moments of escalation, crafting slogans and recasting Europe as an “unfair trader”. Greer intervenes during negotiations to codify those impulses into agreements. Lutnick, meanwhile, ensures continuity by translating presidential instinct into policy routines. Together they form a vertically integrated chain of influence: Navarro provides doctrine, Greer manages diplomacy, and Lutnick enforces implementation. 

Navarro dominates moments of escalation, crafting slogans and recasting Europe as an “unfair trader”. Greer intervenes during negotiations to codify those impulses into agreements. Lutnick, meanwhile, ensures continuity by translating presidential instinct into policy routines. Together they form a vertically integrated chain of influence: Navarro provides doctrine, Greer manages diplomacy, and Lutnick enforces implementation. This inner circle has marginalised moderating voices from the National Economic Council and the Treasury, both of which were diminished in Trump’s second term. The balance of power has thus shifted decisively toward the protectionist bloc. This configuration makes further tariff escalation with the EU not only plausible but structurally embedded in the administration’s policymaking logic. In this structure, however, it is worth remembering that Trump remains the final arbiter, shaping policy-making through personal, isolated decisions, often controversial and often isolated from expert advice.

In addition, by sidelining the dominant channels of economic expertise and despite a broad consensus on the tariffs’ economic harm, this coalition has already achieved a significant political and paradigmatic shift in the US economic policymaking. 

In addition, by sidelining the dominant channels of economic expertise and despite a broad consensus on the tariffs’ economic harm, this coalition has already achieved a significant political and paradigmatic shift in the US economic policymaking. This raises questions about the policy’s stability, as in democratic settings, experts serve dual roles: they inform decisions and foster clarity in public debate[9]. Both functions have been absent here. Beyond this coalition, key actors around economic and trade policy oppose the reform, and others, including  Secretary of the Treasury Scott Bessent, have struggled to justify the policy or predict its distributional effects. This cleavage creates further confusion about the policy’s implications, raising questions about the polarised, highly top-down nature of the reform strategy. Moreover, reform political theory shows that this kind of exclusionary policymaking rarely delivers sustainable outcomes. In particular, citizen participation[10] and local knowledge[11] help legitimate such complex reforms, such as tariffs. In the US, due to low levels of trust, such inclusive mechanisms were more necessary but absent, with decisions driven by a closed executive circle. Taken together, the lack of deliberation, marginalisation of experts, and political opacity already undermine the reform’s legitimacy and long-term success as much as its questionable economic rationale.

Domestic and Ideological Ecosystem

Beyond the White House’s inner circle, Trump’s trade strategy rests on a broad and uneven domestic ecosystem, an assemblage of industrial lobbies, labour organisations, and ideological networks that together provide legitimacy, pressure, and political reinforcement. 

Beyond the White House’s inner circle, Trump’s trade strategy rests on a broad and uneven domestic ecosystem, an assemblage of industrial lobbies, labour organisations, and ideological networks that together provide legitimacy, pressure, and political reinforcement. This coalition functions less as a single bloc than as a layered structure in which manufacturing, energy, and conservative policy circles converge around a shared narrative.

At its foundation lie the manufacturing and energy sectors, the backbone of Trump’s tariff constituency. Groups such as the Coalition for a Prosperous America (Zach Mottl) and the Alliance for American Manufacturing (Scott Paul) have welcomed the 2025 measures as a long-overdue “reset” to restore industrial competitiveness. Steel producers were among the first to rally. The Steel Manufacturers Association (Philip Bell), the American Iron & Steel Institute (Kevin Dempsey), and major firms, including US Steel, Nucor, and Cleveland-Cliffs, all endorsed the revival of Section 232 tariffs, describing them as essential to counter global overcapacity. Their alignment with the administration has not been incidental: the sector’s strategic and symbolic role as “industrial America reborn” anchors Trump’s economic narrative. Support has also come from adjacent industries. The United Auto Workers union, representing roughly 400,000 workers, called tariffs “a victory” in the effort to reshore jobs. In contrast, construction, energy, and agricultural associations are more wary of this reform, with different interests taking different approaches towards the White House. Finally, the labour union federation AFL-CIO expressed caution, warning that “tariffs without a plan will lead to economic harm” and insisting on parallel industrial and labour-market policies.

Behind this patchwork of sectoral interests lies an organised intellectual infrastructure that sustains the administration’s economic nationalism. The Heritage Foundation’s Project 2025 serves as its doctrinal anchor, describing the trade policy central to the renaissance of the American manufacturing and defence industrial base, and advocating a tariff regime built on “reciprocity”. Similar lines emerge from another key think-tank behind Trump’s agenda, the American Compass, led by economist Oren Cass, which hailed the tariff plan as proof that “the disastrous WTO era” has ended.

A combination of actors inside and outside the government has created the coalition driving this delicate reform, which aims at changing the very foundations of the post-war economic apparatus.

Hence, we can monitor how the driving coalition’s coordination across this ecosystem unfolds through both formal and informal channels. A combination of actors inside and outside the government has created the coalition driving this delicate reform, which aims at changing the very foundations of the post-war economic apparatus. Still, the coalition remains largely fragile. Market reactions to new tariffs have been volatile, and consumer groups, investors, and US allies continue to express unease. Even sympathetic voices warn that protectionism without parallel industrial policy risks hollowing out its own social base. The architecture of Trump’s trade coalition shows adequate coherence at the top but fragmentation below, confirming the hypothesis that the system is held together less by institutional design than by political momentum.

Collective assessment

Having mapped the key actors and interests driving the tariff agenda, the next step is to consolidate this information within an analytical framework that can capture both the politics and the process. The framework developed by Marsh and McConnell (2010)[12] offers precisely such a lens. Conceived to evaluate public policy success in multidimensional terms, it moves beyond the binary of “success or failure” to assess how political, programmatic, and process elements interact over time. Rather than treating outcomes as fixed, it sees them as fluid, being constantly shaped by institutions, coalitions, and shifting perceptions of legitimacy. This approach is beneficial for analysing reforms like Trump’s tariff programme, whose logic is as much political as it is economic.

In this model, political success reflects a policy’s ability to generate and sustain support among key constituencies. Tariff reform meets this criterion only partially. It resonates with Trump’s electoral base by framing trade as a question of sovereignty and fairness, yet polls show declining approval among moderates and business-oriented Republicans. Programmatic success, in turn, refers to the policy’s effectiveness in achieving its stated goals and addressing the problem it was designed to solve. Here, the record is weaker: the tariffs have increased costs and uncertainty, while their contribution to reshoring remains limited. Implementation thus becomes crucial, weighing as both a technical and a political variable in our assessment. In a context of multiple rates, country-specific carve-outs, and intricate rules of origin, customs administrations face heavy demands that strain their systems. Where capacity gaps exist, complexity invites uneven enforcement, discretionary arbitrage, and, in extreme cases, rent-seeking; incoherence thus mutates into additional risk. Finally, process success measures the quality of governance, such as the degree of consultation, coherence, and institutional learning involved. By this standard, the reform fares poorly. Decision-making has been top-down, consultation selective, and interagency coordination has often been bypassed.

It reminds policymakers that responding to the tariff agenda requires considering, or even engaging with, all three fronts: political, programmatic, and procedural. 

Understanding these three dimensions helps decode the apparent contradictions of the tariff regime. It reveals how a policy can be politically salient yet analytically fragile, adequate in narrative terms, but deficient in design and execution. For international observers and engaged partners, especially within the EU, this framework also has a strategic value. It reminds policymakers that responding to the tariff agenda requires considering, or even engaging with, all three fronts: political, programmatic, and procedural. In other words, in a comprehensive counter-strategy, purely economic arguments will remain inadequate. Recognising that Trump’s trade policy functions as an ongoing political process rather than a fixed economic doctrine will thus allow European actors to perceive it more accurately and, therefore, craft adaptive responses and measures that are less vulnerable to sudden shifts in US strategy. In this sense, the framework is not only diagnostic but also prescriptive, providing the conceptual discipline needed to command policy strategy in an inherently volatile policy environment.

Table 2: Assessment of Trump Tariffs’ Success

Dimension Assessment of Trump’s Tariffs Process Success Weak: Top-down, opaque, lacking consultation and public engagement Programmatic Weak: unclear goals, rising costs, retaliation risks Political Moderate: energises base, builds new coalition, frames foreign competition as a national threat

Based on: Marsh & McConnell (2010): “Towards a framework for establishing policy success”[13]

Conclusion

Internationally, tariffs function more as a negotiating instrument than a coherent trade policy; domestically, they operate as a narrative device, reinforcing Trump’s political messaging about restoring manufacturing and protecting American jobs.

The US tariff reform has been designed and implemented in ways that reform theory suggests are unlikely to succeed. Setting aside the risks it poses to the global economy, its economic rationale is weak, its objectives unclear, and its execution inconsistent. Yet these very weaknesses illustrate how power, ideology, and uncertainty now interact in the making of American trade policy, creating a coalition driving a highly disputed reform. Internationally, tariffs function more as a negotiating instrument than a coherent trade policy; domestically, they operate as a narrative device, reinforcing Trump’s political messaging about restoring manufacturing and protecting American jobs, thereby regaining economic sovereignty.

 

Recent judicial developments should also be taken into consideration when assessing the reform holistically. Lower federal courts have already found core elements of the tariff scheme unconstitutional, and the pending Supreme Court review could convert legal contestation into a decisive political variable. Judicial pushback does more than test legality; it can alter tactical choices within the administration (appeals, selective implementation, and legal workarounds), recalibrate bargaining leverage abroad, and create deadlines and windows for negotiation that political actors must account for.

The result is a system that is at once personalised and unpredictable, a policy arena that privileges immediacy over institutional coherence.

The reform process reflects elements of both the aforementioned high-ambiguity and interactive models of policymaking. As in the high-ambiguity reform model, solutions precede problems, so tariffs emerge as pre-packaged answers to diffuse labelled grievances such as economic decline, deindustrialisation and trade deficits. The interactive elements lie in how these policies mutate through feedback loops of crisis, shifted coalitions and opposition, and negotiation. Rather than linear policy design, we see a process of continuous adaptation, in which actors improvise around presidential impulses and external reactions, insulated primarily from expert advice. The result is a system that is at once personalised and unpredictable, a policy arena that privileges immediacy over institutional coherence. Or, in other words, a chaotic and conflict-prone policy environment, where outcomes are contingent on political manoeuvring rather than strategic design.

Framing this process through the proposed multidimensional framework clarifies why this reform endures politically despite its fragility. Politically, it speaks to the core constituencies and re-anchors Trump’s electoral narrative, even as broader public approval erodes. Programmatically, it remains weak, producing short-term symbolic victories but slight measurable improvement in economic performance. Process-wise, it shows minimal coordination and consultation, driven more by loyalty networks than by bureaucratic or expert procedure. Taken together, these dimensions depict a reform that succeeds in communication inside the party’s electoral base but fails as national policy.

For Europe, this analysis carries immediate strategic implications. To adapt to this new transatlantic relationship and respond effectively to future additional trade negotiations, EU policymakers must treat US actions not as static measures to be countered, but as interactive processes to be handled carefully. Tariff levels, exemptions, and bilateral deals will likely continue to fluctuate because the system that generates them is inherently unstable. Negotiators and analysts should therefore build strategies premised on volatility, crafting flexible instruments to manage recurrent shifts, such as rapid-response mechanisms, conditional retaliation frameworks, and coordinated communication channels[14]. The objective is not to mirror US escalation, but rather to remain salient within it, to anticipate rather than react.

Figure 3: Handling Unstable US Trade Policy

 

Source: Author’s illustration, synthesising insights from policy analysis and reform theory.

 

By reading US trade politics through the frameworks presented here, negotiators can better distinguish performative conflict from substantive negotiation, thereby reducing the risk of overreacting to symbolic measures.

Moreover, understanding the dynamics behind the tariff regime helps disentangle intent from outcome. Recognising that Trump’s trade policy operates simultaneously as an electoral project, an ideological statement, and a negotiating tactic could enable Europeans to prioritise engagement where material interests align and to contain disputes where they do not. By reading US trade politics through the frameworks presented here, negotiators can better distinguish performative conflict from substantive negotiation, thereby reducing the risk of overreacting to symbolic measures.

Capturing this concept is essential. Codifying the reform’s nature as a policy process reveals that it is interactive, unpredictable, and highly non-linear – qualities that ensure volatility will persist even after temporary deals, such as the July compromise. This unpredictability could also explain why criticism of the EU’s response often misses the bigger picture: the very object of that response is unstable, fragmented, and subject to sudden shifts.

Understanding trade reform in this way provides a firmer foundation for assessing policy choices in this new global economic landscape. The US is no longer operating within a stable, rules-based framework. This makes traditional forecasting inadequate. Instead, analytical capacity must now focus on process-tracking, which involves monitoring better networks of influence, institutional signals, and domestic political incentives. Policymakers should expect reversals, disputes, and evolving coalitions to shape their trajectory. Only by situating Europe’s options within this broader context of how the US trade policy is formulated can public debate and strategic planning become more coherent. In short, understanding the how of Trump’s tariff policy is now as important as understanding the what. Ultimately, this perspective not only helps interpret the current turbulence but also anticipates future disruptions in the global trade order.

[1]J. Martinez-Vazquez, Successful tax reforms in the recent international experience: Lessons in political economy and the nuts and bolts of increasing country tax revenue effort, ICEPP Working Papers, Paper 214, 2021.

[2] J. Kingdon, Agendas, alternatives, and public policies, Boston: Little, Brown, 1984.

[3] J.D. Aberbach & T. Christensen, Why reforms so often disappoint, The American Review of Public Administration, 44(1), 2014, pp. 3–16.

[4] D. Rodrik, The positive economics of policy reform, The American Economic Review, 83(2), 1993, pp. 356–361.

[5] Ibid.

[6] J. Kingdon, Agendas, alternatives, and public policies, Boston: Little, Brown, 1984. See also J.W. Thomas & M.S. Grindle, After the decision: Implementing policy reforms in developing countries, World Development, 18(8), 1990, pp. 1163–1181.

[7] K. Orach, M. Schlüter & H. Österblom, Tracing a pathway to success: How competing interest groups influenced the 2013 EU Common Fisheries Policy reform, Environmental Science & Policy, 76, 2017, pp. 90–102.

[8] L. Haelg, S. Sewerin & T.S. Schmidt, The role of actors in the policy design process: Introducing design coalitions to explain policy output, Policy Sciences, 53(2), 2020, pp. 309–347.

[9] M. Schudson, The trouble with experts – and why democracies need them, Theory and Society, 35, 2006, pp. 491–506.

[10] A. Michels & L. De Graaf, Examining citizen participation: Local participatory policy making and democracy, Local Government Studies, 36(4), 2010, pp. 477–491.

[11] F. Fischer, Citizen participation and the democratization of policy expertise: From theoretical inquiry to practical cases, Policy Sciences, 26(3), 1993, pp. 165–187.

[12] D. Marsh & A. McConnell, Towards a framework for establishing policy success, Public Administration, 88(2), 2010, pp. 564–583.

[13] D. Marsh & A. McConnell, Towards a framework for establishing policy success, Public Administration, 88(2), 2010, pp. 564–583.

[14] A more comprehensive strategy for the EU was initially proposed by T. Gehrke, in “Brussels hold’em: European cards against Trumpian coercion”, ECFR/576, 2025. Available at: https://ecfr.eu/wp-content/uploads/2025/03/Brussels-holdem-European-cards-against-Trumpian-coercion.pdf

Since 2004, the European Union (EU) and India have fostered a strategic partnership, with Summits held over the years to strengthen their relations. Despite periodic inconsistencies and obstacles that have hindered the partnership’s growth, their collaboration appears to have gained renewed momentum in 2025. Attention has been growing for the upcoming 2026 Summit, which has the potential to serve as a crucial opportunity to deepen their ties. This policy brief reviews their bilateral interactions, addresses current challenges in the EU-India relations, and explores expectations for the upcoming Summit. It also underscores Greece’s role in identifying new opportunities to deepen EU-India cooperation and suggests measures to further enhance their strategic partnership.

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The analysis is available only in Greek.

In early 2025, the new US administration announced a series of tariff increases in violation of its commitments in the World Trade Organization (WTO), undermining the very system of trade rules that the US had helped establish after World War II. The US actions led to many retaliatory responses of increased tariffs by trading partners including the European Union (EU). Over the next several months, the US engaged in a series of negotiations leading to so called ‘framework’ agreements with the EU and others.

This paper explores first, the short term implications of these chaotic changes in the world trading regime on the economies of the EU and Greece. Second, it considers how the world trading system will evolve in the medium to longer term and its policy implications for the EU and Greece. The paper concludes that the recent turmoil in international trade should be addressed through the implementation of a basic set of policies to strengthen European integration and institutions as articulated by recent major studies commissioned by the EU, as well as, through trade agreements between the EU and like-minded countries.  These policies should help the European Union rise to the challenges created by the current turmoil and lead to a future strengthening of the WTO.

Read here the policy paper by Constantine Michalopoulos, ELIAMEP Senior Policy Advisor; former senior official World Bank and USAID; Adjunct Professor, American University, School of Advanced International Studies, Johns Hopkins University.

Introduction 

In early 2025, the Greek economy had mostly recovered from the disastrous calamities of a decade earlier and the pandemic’s aftermath. Although income levels had not regained pre debt crisis levels, the economy had been growing steadily for three years. However, continued structural deficiencies, an aging population, as well as technology and climate change, all presented serious challenges to long term economic prospects; and there were two raging wars in the near vicinity. [1]As if these challenges were not enough, the new US administration announced a series of tariff increases in violation of its commitments in the World Trade Organization (WTO), undermining the very system of trade rules that the US had helped establish after World War II.

In the US, the administration’s actions prompted numerous challenges to their constitutionality.[2] Internationally, they led to many retaliatory actions by trading partners including the European Union (EU), China and others. Over the next several months, the US backed off a number of the very large early tariff increases and engaged in a series of negotiations leading to so called ‘framework’ agreements with many countries, including the EU. But throughout 2025, the US continued to introduce arbitrary tariff changes, all in violation of the fundamental Most Favored Nation (MFN) non-discrimination principle, enshrined in the WTO, thereby raising significantly the degree of uncertainty in trading transactions.

The purpose of this paper is twofold: first, to explore the short-term implications of these chaotic changes in the world trading regime on the Greek economy; and second, to consider how the world trading system will evolve in the medium to longer term and its implications for the EU and Greece. The analysis, by its very nature, will be tentative, as the policy changes are relatively recent and have not had the time to make a serious impact on trade transactions. Besides, the main new element introduced by the US actions is increased policy uncertainty.

The EU- US Agreement 

The US administration introduced peremptorily and unilaterally a number of tariff changes in early 2025 without offering an authority or justification for them. For example, President Trump announced plans on February 26, 2025, to impose tariffs of 25 percent on imports from the European Union. The major executive action that prompted reaction from the EU occurred on April 2, when the US announced a set of so called “reciprocal” tariffs affecting more than 60 countries, some as high as 50% depending on the countries’ trade balance with the US. According to these, International Economic Emergency Powers Act (IEEPA) tariffs, the US reciprocal rate on imports from the EU would have been set at 20 percent. On May 23, President Trump announced he would be imposing a 50 percent reciprocal tariff on the EU beginning June 1. On May 25, he announced these tariffs would take effect July 9 instead. On July 12, President Trump announced the reciprocal tariffs for the EU would be set at 30 percent by August 1 [4].

In the meantime, the EU retaliated by lifting the suspension of previous tariffs, with rates of up to 50 percent, affecting $8 billion of US exports scheduled for April 1, 2025 and increased tariffs to an additional $20 billion of US exports scheduled for April 13. Finally, on July 15, the EU released a list of $84 billion worth of US goods that would face retaliatory tariffs, if no deal was reached by August 1 [5].

On August 4, 2025, the US and the EU reached a framework agreement on tariffs and other economic issues which governs the tariff rates affecting trade between them to date.

On August 4, 2025, the US and the EU reached a framework agreement on tariffs and other economic issues which governs the tariff rates affecting trade between them to date.

According to the main trade related commitments of the agreement, the US will:

• Apply a maximum, all-inclusive 15% tariff ceiling for EU products, including cars and car parts, pharmaceuticals, and semiconductors [6] and [7].
• Apply only MFN tariffs, (which are effectively zero or close to zero) to the following EU products: unavailable natural resources (including cork), all aircraft and aircraft parts, generic pharmaceuticals and their ingredients and chemical precursors.
• Impose tariffs of 50% to aluminum and steel products justified by the US under a different exemption, on grounds on national security (US Section 232, of the 1962 Trade Expansion Act).

The EU agreed to:

• Eliminate completely tariffs on a large number of industrial products imported from the US—with an estimated value of €5 billion [8].
• Improve significantly market access to US exports through tariff reductions for certain seafood, nuts, dairy products, fresh and processed fruits and vegetables, processed foods, grains and planting seeds, soybean oilseeds, pork and bison meat and lobster  all implemented via product-specific Tariff Rate Quotas (TRQs).

In addition, the two sides agreed to work together to eliminate non-tariff and technical barriers to trade, accept and provide mutual recognition of each other’s standards in automobiles as well co-operate on a number of other important issues affecting trade with China—for example, regarding the latter’s imposition of export controls on rare earths. Finally, the agreement contains a number of EU commitments to ease procedural requirements which the US feels restrain its exports as well as to purchase $40 billion worth of AI chips [9].

There was widespread criticism that the deal was too one-sided favoring the US. But there were also voices suggesting that this was the best the EU could do under the circumstances and that, in any case, there was no logical response to the US requests.

There was widespread criticism that the deal was too one-sided favoring the US. But there were also voices suggesting that this was the best the EU could do under the circumstances and that, in any case, there was no logical response to the US requests [10].

The US actions regarding tariffs were expected to be implemented in some cases as of September 1, 2025 and in others as soon as the EU Commission submitted the needed legislative proposals, which it did in September, 2025. The EU Council took the necessary steps to implement the agreement, including through the establishment of tariff quotas for US products [11].  It is expected that the EU Parliament will complete approval of the relevant legislation by February 2026. At this point it is unclear whether the Parliament will introduce changes in the agreement or what will happen, if such changes are introduced.

Economic Impact on the EU- short term

In the course of 2025 various studies concluded that the US tariffs would result in significant GDP losses both to the US and to the global economy, as well as increased inflationary pressures in the short term. As the year progressed, the estimates of the damage the tariff actions would cause were reduced for several reasons: exporters absorbed some of the increased tariff costs; many importers anticipating the tariffs, had stocked up during the year and the original tariff increases were subsequently reduced.

In the course of 2025 various studies concluded that the US tariffs would result in significant GDP losses both to the US [12] and to the global economy, as well as increased inflationary pressures in the short term [13]. As the year progressed, the estimates of the damage the tariff actions would cause were reduced for several reasons: exporters absorbed some of the increased tariff costs; many importers anticipating the tariffs, had stocked up during the year and the original tariff increases were subsequently reduced [14].

The economic impact of the EU-US trade agreement on individual EU countries will depend on several factors: (a) the amount and composition of each country’s exports to the US; (b) the amount and composition of its imports from the US whose tariffs will be reduced; (c) the specifics of the pass-through in each traded good; (d) any exchange rate changes following the imposition of the tariffs; and (e)  the indirect effects on each country’s future trade of changes in income resulting from the EU-US agreement.

Early studies on the issue [15], suggested that the US tariffs will result in a decline of approximately 0.2-0.3% of EU GDP in 2025. A more recent study [16] confirmed the 0.3 % GDP decline on average and suggested that different countries will have different results depending on the importance of the US in their export market and the composition of their exports. Using a model that took into account the longer term second order effects adversely affecting EU exports as a result of declines in EU and other countries incomes as a consequence of the tariffs, the study suggested a decline of 0.5% on average for 2026. Similar views were expressed by European business in a survey in November 2025 [17]. The most recent IMF World Economic Outlook [14] includes two risk scenarios for 2026: in the worst case, GDP of the euro area would decline by about 1%t below its original baseline in 2026; in the best case, output of the euro area could increase by around 0.7–0.8 percentage points above baseline despite the tariffs. But no studies appear to have included the longer term positive but likely small effects of EU incomes rising as a result of the future reduction of tariff barriers against US imports.

In the first 8 months of 2025, US exports to the EU increased by about 10% and imports, slightly less—around 9.5%. This resulted in an increase in the US trade deficit with the EU in the first eight months of the year from $151.9 billion in 2024 to $165.8 billion in 2025. The results are skewed however, because of very large anticipatory US imports in early 2025. In the months June- August 2025, US imports from the EU declined relative to 2024 [18].

Economic Impact on Greece-short term

Early commentary on the impact of the EU-US agreement on Greece suggested a much higher decline in Greece’s exports and GNP in 2026 than that presented in the above studies. Kathimerini [19] predicted a GDP decline of 0.5%-1.0% in 2025, and smaller effects ranging from 0.2% to 0.4% in 2026 and even smaller declines in 2027.

…the effect of the US tariff increases and the subsequent US-EU trade agreement will result in significantly lower adverse effects on Greek GDP. The main reason for this is that Greece depends much less on the US market for its exports than the EU average.

It is unclear on what analysis these projections were based and no model estimates based on an econometric model of Greece appear to exist. Nevertheless, given the projections for EU as a whole and the size and composition of Greek exports, the analysis below will argue that the effect of the US tariff increases and the subsequent US-EU trade agreement will result in significantly lower adverse effects on Greek GDP. The main reason for this is that Greece depends much less on the US market for its exports than the EU average. Table 1 below shows the evolution of Greek trade with the EU, the US and the rest of the world (ROW) over the 2018-2024, period, i.e. after the Greek economy stabilized from the debt crisis.

Table 1 shows that Greek exports to the US account pretty steadily for about 4% of total Greek exports and about 10% of Greek exports outside the EU. This compares to an average of EU exports to the US of 21% of EU exports to the rest of the world [16]. Roughly speaking, Greece is about half as much exposed to the US market for its exports relative to the average EU member, and much less than countries like Germany or Ireland. The story is similar for Greek imports. Greece has run a small surplus in its trade balance with the US in the last two years while running a persistent huge trade deficit overall. Greece offsets its traditional large trade deficits by running a large surplus in services, especially through earnings from shipping and tourism [21].

The composition of Greek exports to the US does not suggest that Greece would be hit harder than the average EU member by the increased US tariffs. While no detailed estimates are available, the main problem appears to derive from Greece exports of aluminum and steel products which are subject to 50% tariffs (see below Table 2). It should be noted however, that the US tariffs on aluminum (and steel) had been earlier imposed by the US on the grounds of security (Sec. 232) and separately from the IEEPA tariffs that ultimately led to the US- EU agreement.

 

Table 2 shows two dimensions of the importance of aluminum and steel on the Greek economy: first, they are small relative to Greek exports to the US, 7.0% and 2.1% respectively; and second, that the proportion of Greece’s exports of aluminum and steel products to the US are quite small relative to the total Greek exports of these products, 5.1% and 6.5% respectively. The latter would imply that Greek exporters could shift sales of these products elsewhere.[3]

Of the products in which the US is an important market accounting for more than 10%  of total exports, only the agricultural products in the categories of Vegetables and Fruits (20.9%), Essential oils (10.5%) and Edible fruits (16.2%) are likely to be affected by the new US tariffs. And the US has committed that these will not exceed 15%. Greece is not an oil producer and the large exports of oil products  to the US as well as the rest of the world are determined primarily by decisions of the oil companies, some US owned, which import crude oil from the Middle East refine it in Greece and ship out oil products all over the world.  The US importance of the category ‘Aircraft, spacecraft’ probably reflects transactions of air carriers and repairs of aircraft engines and parts as Greece does not produce either aircraft or spacecraft. Greece does produce a variety of crude materials, salt earth etc., for which the US market is significant (21.6%), but as noted earlier, the US will maintain minimal tariffs on these products.

 

Estimates of US trade with Greece for the first eight months of 2025 showed the US to have decreased both its export and its imports to and from Greece- in the case of exports by 10% in the case of imports—i.e. exports from Greece by 3.3% [19].  These data suggest that the pattern of Greece’s trade with the US is somewhat different than that noted earlier for the EU as a whole. It remains to be seen how this pattern will be affected in the longer term by the emerging changes in the world trading system.

Recent reports confirmed the mixed impact of the US tariffs on Greek exports to the US.  Tariffs on edible fruits have been recently removed, but exports of dairy products have been adversely affected. Despite high tariffs, “iron/steel pipes, rose from a zero base in 2023, to €21.8 million in 2024 and to €49.2 million in the April-September 2025 period. Electrical conduits reached €38.4 million in 2024 but during the tariff period they experienced a decrease of 88.1%” [22]. 

On balance, given the relatively small importance of the US market to Greece, compared to other EU countries, it is fair to conclude that the impact of the US-EU agreement on Greek GDP will be significantly smaller than for the EU as a whole. We would guess that the impact could be in the neighborhood of 0.1% to 0.15% reduction of GDP relative to baseline forecasts for 2025 and 2026, much smaller than earlier estimates.

On balance, given the relatively small importance of the US market to Greece, compared to other EU countries, it is fair to conclude that the impact of the US-EU agreement on Greek GDP will be significantly smaller than for the EU as a whole. We would guess that the impact could be in the neighborhood of 0.1% to 0.15% reduction of GDP relative to baseline forecasts for 2025 and 2026, much smaller than earlier estimates. That size of an effect could easily be overwhelmed by other developments in Greece or in the global economy.

The World Trade System

…the US actions on tariffs violated its commitments to the core principle of the WTO of not unilaterally increasing duties that have been capped in previous agreements with its partners (Article II of the GATT) . Similarly, the bilateral deals, such as those with the UK as well as the EU, China, and other countries violate US commitments to the most-favored nation (MFN) non-discrimination clause (Article I of the GATT).

Throughout 2025, the US actions on tariffs violated its commitments to the core principle of the WTO of not unilaterally increasing duties that have been capped in previous agreements with its partners (Article II of the GATT)[4]. Similarly, the bilateral deals, such as those with the UK as well as the EU, China, and other countries violate US commitments to the most-favored nation (MFN) non-discrimination clause (Article I of the GATT). Such preferential deals are permitted only if they are part of an established Free Trade Area or Customs Union. These deals also defy the WTO approach of promoting trade through multilateral negotiations [23] and [24].

For a while, it appeared that the US may wish to leave the WTO. It had withdrawn from other multilateral institutions such as UNESCO and WHO and it had not paid its WTO dues for two years. There were even some voices suggesting that the trading system as a whole would be better off if the US did leave the WTO [25]; or for that matter that it could be expelled [26]. But the US did pay its dues, and others have argued that the US should stay in the WTO as it could provide a useful counterbalance to China which has also been guilty of significant WTO violations.

It is also fair to argue that, in the last twenty years, the WTO based trade system has been undermined by an erosion of global commitments to multilateral rules by many countries including the EU.

It is also fair to argue that, in the last twenty years, the WTO based trade system has been undermined by an erosion of global commitments to multilateral rules by many countries including the EU. It started first, with the failure of completion of the Doha Round of negotiations, which were abandoned after more than a decade of trying—for which, countries like India and China, were as responsible as the EU and the US.  Later, economic and political and developments resulted in reduced emphasis on multilateral approaches to improve firms’ participation in international trade:

• Attempts to facilitate small and medium enterprises foreign trade participation led to “mini-deals” that may be beneficial for a subset of firms in certain sectors but undermine global standards. “The EU has concluded over 2,000 such mini-deals, which cumulatively cover a large share of EU trade participation in global supply chains” [27].
• Countries, and the EU in particular, have established regulatory standards based on concerns about the environment, health and safety, cross border data flows, cyber-security, consumer or worker protection. The national agencies tasked with implementing regulations generally have not wanted, even if they are permitted — to adjust regulatory norms simply to facilitate trade [28].
• The Covid-19 pandemic resulted in a sudden and large contraction in global trade, revealing deep vulnerabilities in international supply chains. This led many countries to introduce policies that promote strategic autonomy, meaning steps that would the ensure availability of critical goods without dependence on foreign suppliers. Governments adopted export restrictions, stockpiling, and incentives for domestic production or near-shoring [27].
• A direct consequence of the strategic autonomy logic was a renewed interest and justification of a wide range of industrial policy measures. Industrial policy became more fashionable and acceptable [29].

Despite, or one would argue, in parallel with these developments, the WTO continued to function. A fisheries agreement came in to force in mid-summer and the EU finalized a WTO compatible agreement with Mercosur that had been under negotiation for more than a decade. And as WTO Director Ngozi Okonjo-Iweala noted in a September 17, 2025 speech, following the US measures there was an 8% decline of trade conducted under MFN rules, but MFN rules continued to apply to 72% of world trade.

In light of these developments, what can be said about the future of rules that would govern world trade? As of November 1, the US average effective tariff rate was 13.1% compared to 2.5% in 2024 [31]. Clearly the most important new element is the introduction of additional uncertainty, for better or worse. On November 14, 2025, the US administration, facing increasingly unfavorable reaction by the US public to the imposition of tariffs on consumer goods, eliminated the   IEEPA tariffs on a whole lot of food and agriculture products. And the constitutionality of all of the IEEPA tariffs is uncertain with the US Supreme Court expected to rule on the issue in the spring of 2026.

Still, given the apparent attraction of tariffs as a foreign policy instrument to President Trump, it is expected that in the event the US Supreme Court rules that the IEEPA tariffs are unconstitutional, the US Administration will seek to justify tariffs under different legislative provisions, such as under section 301 or 202 of the US code or under section 122 of the Trade Act of 1974 which gives the President the authority to impose a temporary tariff of up to 15 percent for up to 150 days to address “large and serious United States balance-of-payments deficits”. All these measures are likely to be challenged in US courts, resulting in litigation that could easily last another 1-2 years.

This means essentially, that global uncertainty on the rules of international trade is likely to continue at least until the end of the current US administration in 2028.

This means essentially, that global uncertainty on the rules of international trade is likely to continue at least until the end of the current US administration in 2028. A look into the Trade Policy Uncertainty (TPU) Index is quite telling in this respect: it shot up in early 2025, came down for a while and shot up again [32]. Other things equal, this factor alone is going to affect adversely the volume of future world trade.

Medium Term Scenarios

The uncertainties surrounding the future of the world trade system have led to the elaboration of many alternative scenarios. In considering these scenarios, one should keep in mind that trade negotiations take a long time to conclude as they involve detailed analysis of data, something that the ‘framework’ agreements concluded by the US did not do. Nevertheless, all scenarios about the future of word trade in the medium term—until 2028, are bleak.

The scenarios discussed below do not include what might happen, if there is a major political or military conflict involving the three major protagonists in world trade, the US, the EU and China. Also, for reasons discussed above, the scenarios do not include a ‘Retreat’ scenario in which the US administration, faced with a recession and declining public support, reverses course and abandons its WTO inconsistent tariff policy.

Scenario 1- Malaise

Under this scenario, WTO members would tolerate higher tariffs and US-dictated deals for as long as they last, while continuing to go about their other WTO business as usual. “The relevance of the WTO will continue to be eroded, though its stabilizing influence may not disappear entirely”[5]. But this scenario contains a lot of complex issues for WTO members. For example, Brazil may file a complaint in the WTO that the US-EU agreement that gives preferential treatment to US exports to the EU damages Brazil’s interests. In this case the EU may not wish to jeopardize its agreement with the US or face counter-measures, in which case it may need to appeal through the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) members [33].

It is unclear how long WTO members would be willing to accept this situation. Perhaps they will wait until the end of the current US administration- while in the meantime they pursue other options. In the case of the EU, it is clear that it would be desirable to explore links with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). A free trade agreement between the EU and CPTPP will account for 30% of world trade. Krueger has argued that the two groups should combine to establish a new organization, the GTO without the US [25].

Scenario 2 –Fragmentation

Under this scenario fragmentation accelerates. The MFN principle and multilateralism are further weakened and give way to a new logic: every country or exporting firm cuts the best deal for itself.[6]

The scenario has many regional variants. If the WTO continues to produce nothing and the EU combines with CPTPP and others to produce a modern agreement, is it necessary to anchor it in the WTO ?

A lot will depend on what role China will want to play. Under one variant, China could take the lead in organizing a large group of countries, for example through an expanded BRICS, to set up their own system. But many countries are worried about unfair Chinese policies that support Chinese firms as it promotes its manufacturing exports because of over capacity at home; and/ or countries may be concerned about China’s willingness to employ trade as a coercive instrument for foreign policy purposes.

Still, such an initiative by China could force Europe to work with Japan, South Korea, and Australia to create their own group and the US with some Latin American and Caribbean to establish yet another. Africa would strengthen its regional trade institutions and possibly ally itself with the BRICS. In all these variants, the WTO is not closed down, but becomes increasingly irrelevant. On the other hand, China has recently indicated that it is willing to abandon its WTO treatment as a ‘developing country’ suggesting a willingness to work within the WTO and thereby dropping a source of a lot of disputes.

The Future of EU Trade Policy

In these uncertain times, it would be natural for the EU to take the lead in strengthening the global multilateral trade system, to the benefit of its members, including Greece but also to the benefit of global trade and the reduction of global poverty.

Co-operation in trade was the essence of what started European integration through the Treaty of Rome more than 70 years ago. In these uncertain times, it would be natural for the EU to take the lead in strengthening the global multilateral trade system, to the benefit of its members, including Greece but also to the benefit of global trade and the reduction of global poverty.

EU should start working hard to strengthen its links with CPTPP. Combined with the EU- Mercosur agreement, this would make a formidable group of countries which could become the basis of attracting other members from Africa and Latin America.

The EU Commission views at this point is that an EU-CPTPP link is a complement and not a substitute to the WTO [34].[7]. In my view, EU should start working hard to strengthen its links with CPTPP. Combined with the EU- Mercosur agreement, this would make a formidable group of countries which could become the basis of attracting other members from Africa and Latin America. It could then work with China and possibly the US to strengthen the multilateral trade system and the WTO.

Such an effort should have two dimensions: first, work with others to establish needed reforms to the WTO; second, adopt internal EU policies that use trade to support equitable and sustainable economic growth for its people.

Regarding WTO reform Mavroidis [24] suggests that it may be useful for the international community to attempt a last-ditch negotiation to bring the US back to the multilateral house, and they should be prepared to amend the WTO’s rules in order to lure the US back to the spirit of the multilateral agenda that would benefit the institution at large. This initial agenda should take care of the US’s concerns such as the introduction of more flexibility in the current Safeguards Agreement or to deal with oversupply in particular sectors as well as amending the Compulsory Third-Party Adjudication (CTPA).

This is certainly worthwhile. The question is at what point it should be done. The current administration has in mind a totally different non- multilateral approach to international trade, feels that the “ancient régime” is obsolete, and should be substituted with a new supposedly more fair and balanced scheme. In any case, putting together an EU- CPTPP understanding will take time, after which a different US administration may be in place which may be more agreeable to global trade agreements. 

There is a need to revise the basis of participation in the WTO by different groups of countries.

It is clear that WTO reforms are needed in several areas in addition to the ones noted above that bother the US. These include the following five areas:

• There is a need to revise the basis of participation in the WTO by different groups of countries. The existing provisions regarding special and differential treatment that permit a group of countries to participate on the basis of more limited commitments to general rules for being ‘developing’ based on ‘self-selection’ proved unworkable during the Doha Round[8]. Yet, there is a need to reduce differences in national regulatory regimes that impact international trade through the mutual adoption of agreed good regulatory practices to which not every WTO member can or may be willing to adhere. Such efforts can be pursued among like-minded states — that is, on a plurilateral and variable-geometry basis. Open Plurilateral Agreements (OPAs) — agreements between groups of countries on specific policies that significantly affect international trade costs and that are open to participation to any country willing to implement a set of agreed rules and disciplines can make a major contribution to facilitating trade. Such agreements can be pursued in several areas such as Digital Trade, Climate and Environment [28], as well as subsidies (see below).[9]

• The WTO subsidies agreement should be revised in order to address several issues: first, is the issue of how to deal with subsidies that provide public goods—including those that address environmental issues. A subsidy that reduces world market prices for products like solar panels or wind turbines has positive consequences for the energy transition, but negative economic repercussions for local producers. Revisiting current WTO rules that center on the adverse effects of foreign subsidies on national firms to recognize that some types of subsidies may be appropriate and desirable to address market failures, in the process benefiting foreign countries, is an important subject for plurilateral negotiations. Still other issues arise from the complexities involving subsidies of trade in global value chains, as well as the desire to pursue ‘industrial’ policies.

• The definition of ‘economic security’ needs to be clarified as the relevant WTO provisions are too vague.

• There is a need to make meaningful progress of liberalizing trade in services. Everybody is infatuated with the desire to protect and restore production of goods, in particular manufacturing, forgetting that services will inexorably rise as a share of incomes and output.

• The link between trade policy and environmental action needs to be clarified especially as the EU is starting to implement its Carbon Border Adjustment Mechanism (CBAM) in January 1, 2026. As noted above, this is an area where an OPA can be especially useful as it is quite clear and it is internationally agreed that poorer countries are not in a position to make the same kind of commitments as more developed economies. A specific proposal for an OPA of such a ‘club’ is contained in [37].

This is a tall order of reforms that need to be undertaken. They will take time to negotiate in part because the political economy of negotiating trade issues resulting from regulatory regimes is more difficult than negotiating a mutual reduction of quotas or tariffs where the costs to some domestic producers can be offset by gains of exporters.  Also, the Doha failure suggests that countries are not likely to want to try to have a ‘Round’ where nothing is agreed until everything is agreed by every participant. A more modest approach using OPAs may be a better avenue for future reform.

These efforts must be accompanied by EU policies that use trade to support a sustainable and equitable growth of incomes. In this connection, measures that raise productivity of EU producers are critical.

These efforts must be accompanied by EU policies that use trade to support a sustainable and equitable growth of incomes. In this connection, measures that raise productivity of EU producers are critical. Since 2019 labor productivity in the EU grew by 2% compared to 10 % in the US [38]. According to a recent study, the main difference between US and EU in labor productivity growth is that EU productivity rose much less than that of the US in the services sector since 2000 [39].

The Draghi study commissioned by the EU in 2024 contains a large number of recommendations on how to raise productivity, some of which are only now slowly being implemented [40]. In particular, there is concern that the EU is lagging far behind the US and China in the application of AI which is critical to future productivity growth. According to Draghi’s report, the General Data Protection Regulation (GDPR), introduced by the EU to protect citizen’s privacy in 2018, is a drag on Europe’s competitiveness. “Europe must move beyond fragmented and overly rigid regulatory structures if it wants to remain competitive in a fast-changing digital landscape. Evidence already shows that GDPR data transfer rules have constrained export potential, and additional regulatory layers introduced through the AI Act risk amplifying these pressures”[41].

Measures to promote diversification of imports of oil and natural gas, by accelerating the green energy transformation are of obvious importance to future trade policy as well as steps to diversify supply of critical minerals away from China. These efforts, however, should not lead to generalized promotion of import substitution through protection incompatible with WTO provisions or commitments with regional trade partners.

“A ‘manufacturing-first’ attitude has taken hold in the European economic policy discussion. New strategies and industrial policies are designed with the ambition of boosting development and output in traditional industrial sectors” [42].[10] There is a clear danger, that disturbances in international trade will encourage the establishment of inefficient EU production —reshoring or home-shoring justified on the vagaries of ensuring adequate supplies of ‘critical’ products from global supply chains—while the future lies in services where growth has been and likely will continue to be greater than in manufacturing; and where the EU is the largest exporter in the world.

Implications for Greek Policy

For Greece, foreign trade policy is determined at the EU level.

For Greece, foreign trade policy is determined at the EU level. This should be helpful in protecting its interests through the large weight that Brussels would bring to bear in any negotiations with China or the US. [11] There are also serious limits to what individual countries can do to promote exports. As Greece has a very small share of exports relative to its GDP, there is a temptation to suggest that export promotion agencies can correct this problem [43]. They obviously can be of some help, but they are not likely to be determinant of overall performance, and in a country like Greece, where there is a tendency of cronyism, there are dangers of trying to pick winners by supporting friends. The best way to promote exports is through general policies that increase productivity and reduce bureaucratic hassles [44].

In this connection, the recommendations of the Draghi report are especially relevant. In many respects, the report sounds as if it was talking specifically about problems facing Greek industry and more generally the Greek economy. The importance of productivity growth to export performance has been well established. In this connection, I argued long ago that the export performance of the ‘Asian Targets’ in the 1960’s was critically dependent on the growth of total factor productivity [45].

Among the Draghi’s report many recommendations are proposals to raise productivity through more training as well as improved technology through increased expenditures on research and development. Implementing these proposals in Greece would require significant increases in both public and private investment from the current levels of roughly 15% of GDP.

Among the Draghi’s report many recommendations are proposals to raise productivity through more training as well as improved technology through increased expenditures on research and development. Implementing these proposals in Greece would require significant increases in both public and private investment from the current levels of roughly 15% of GDP. EU support can be helpful to Greece in this area, but it cannot substitute for stronger and better implemented public sector investments.

Conclusion

In sum, the recent turmoil in international trade should not result in a deviation from the basic set of policies that Greek governments need to pursue in collaboration with their European counterparts to strengthen European integration and institutions. They should do so based on the policy recommendations contained in the several studies referred to above. As it has done in the past, Europe can rise to the challenges created by the current turmoil and restore faith in the prospects of a sustainable and equitable future for its people. This will not happen through retrenchment and protection but through openness to trade. The EU is in the best position to lead a future restoration of a trade system governed by multilateral rules and agreements and a strengthened WTO.

[1]For a discussion see [1] and [2].

[2] Lower US courts judged the IEEPA tariffs to be unconstitutional, but the US Supreme Court permitted them to be retained until it passed a final judgement on them expected in early 2026 [3].

[3] There may be limit to such a shift, as both products, especially aluminum, appear to be in global over supply.

[4] GATT-General Agreement on Tariffs and Trade- incorporated in the treaty establishing the WTO.

[5] This scenario is basically the same as what Cernat [30] called ‘Sclerosis”.

[6] This is similar to Cernat’s’[30] third scenario ‘contagion’.

[7] Experience with international organizations over the last century suggests that they are almost as difficult to shut down—even after their usefulness is questionable [35] as to create new ones

[8] For a detailed discussion of the absurdities in the current system see [37]. For example, Turkey and Israel just like China were considered ‘developing countries’ just because they said so.

[9] Such agreements can also be pursued outside the WTO and at some point brought into the system.

[10] As well as in the United States.

[11] But EU membership may not provide cover in the wider US-China conflict: The recently appointed US Ambassador to Greece expressed her concerns to Prime Minister Mitsotakis about the 67% ownership of the Port of Piraeus by the Chinese firm Cosco and suggested that Greece may wish to force a sale of it in the future. To which the Prime Minister responded that agreements have to be respected [46].

 

 

The policy brief by Dr. Ioannis Armakolas (Head, South-East Europe Programme – ELIAMEP & Director, think nea – New Narratives of EU Integration) and Ioannis Alexandris (Research Fellow, South-East Europe Programme – ELIAMEP & Researcher, think nea – New Narratives of EU Integration), “Enlargement and the EU Budget: Is the price to pay high? The case against fiscal alarmism”, was prepared in the framework ELIAMEP’s initiative think nea – New Narratives of EU Integration, supported by the Open Society Foundations – Western Balkans. 

At a time when EU enlargement is increasingly contested by Eurosceptic and radical-right forces, the policy brief examines one of the most politically sensitive aspects of the debate: the budgetary and fiscal implications of enlargement. Building on think nea’s thematic report on radical-right narratives, the authors analyse how fears about costs to taxpayers, agricultural subsidies, and cohesion funds are mobilised to undermine public support for further EU expansion, particularly in net-contributor Member States.

Drawing on recent EU budget proposals for the 2028–2034 Multiannual Financial Framework, as well as economic modelling and lessons from previous enlargements, the brief demonstrates that the actual fiscal cost of enlargement is modest and manageable, especially when phased-in mechanisms and structural reforms are applied. At the same time, it shows that EU transfers are transformational for candidate countries, particularly in the Western Balkans, Moldova and Ukraine, supporting convergence, institutional reform and infrastructure development.

The analysis also highlights the opportunity costs of non-enlargement, emphasising how past rounds of enlargement generated significant economic gains for existing Member States through trade, investment, labour mobility and integrated supply chains. In this light, the brief reframes enlargement not as a fiscal burden but as a strategic investment in Europe’s competitiveness, resilience and long-term stability.

The paper concludes with concrete policy recommendations on how to reframe public debate, embed enlargement within the EU’s new competitiveness and strategic autonomy agenda, and counter fiscal alarmism by presenting enlargement as a win-win process that benefits both current and future Member States.

You can read the policy brief here.

The South-East Europe Programme of ELIAMEP is a member of the IGNITA network, led by Open Society Foundations – Western Balkans.

Alessandro Ieranò, Project Research Assistant at the South-East Europe Programme (ELIAMEP), explores the interplay between EU enlargement disputes and minority rights in his new article for Contemporary Southeast Europe.

Drawing from the Beleri case and Hungary’s ongoing veto on Ukraine, he observes how, in the context of bilateral disputes between a member (kin) state and a candidate (home) state, enlargement paralysis is a ‘lose-lose’ outcome for all parties involved. Above all, for national minorities, which risk to find themselves caught in the crossfire of politicisation and securitisation.

As he argues, this stems from the of lack of safeguards and alternative-dispute resolution mechanisms in the current enlargement framework, which has turned veto powers from an atomic option into a default practice. This not only enables the politicisation of kin-minorities in candidate countries—adding further straining bilateral relations—but also jeopardises enlargement at the moment when it is most needed. To address this challenge, he proposes a set of policy recommendations aiming at restoring the credibility of the enlargement promise through mutual guarantees to both ‘gatekeeping’ kin-member states and ‘obstructed’ candidate-home states, while preventing the securitisation of national minorities.

You may read the essay here.

Now in its sixth year, ELIAMEP’s annual forecasts return with the Special Edition ““ELIAMEP Outlook – Predictions for 2026” offering expert insights into the year ahead. Twenty-four analysts and collaborators of ELIAMEP examine the key challenges, emerging trends, risks, and opportunities expected to shape Greece, Europe, the Mediterranean, and the wider world in the coming year. This year’s edition is further enriched by five contributions from voices of the “next generation,” bringing fresh perspectives and new ideas into the conversation. A selection of essays was featured in a special supplement of TA NEA on January 3. Read the paper here (in Greek). The full collection will be published in English next week.

The policy brief authored by Dr. Ana Krstinovska “The Western Balkans and Europe’s Defence Readiness: An Industrial Perspective” is an expansion of the finding of the thematic report “Europe’s Overlooked Allies: Why the Western Balkans Matter for EU Defence Readiness” and part of ELIAMEP’s initiative think nea – New Narratives of EU Integration which is supported by the Open Society Foundations – Western Balkans.

As Europe faces an increasingly complex security environment marked by the war in Ukraine, renewed great-power competition, and growing concerns over defence industrial capacity, this brief examines the often-overlooked role of the Western Balkans in strengthening Europe’s defence readiness. Adopting an industrial perspective, the analysis highlights the region’s manufacturing capabilities, cost advantages, and strategic location, positioning it as a potential contributor to the European Defence Technological and Industrial Base.

The brief explores the defence-industrial capacities of Western Balkan countries, their alignment with key EU defence priorities—such as ammunition production, drones, and supply-chain resilience—and the strategic benefits of closer integration. It also identifies persistent barriers, including institutional exclusion from EU defence instruments, governance challenges, and political constraints that hinder deeper cooperation.

Drawing on these findings, the paper argues that defence industrial cooperation can serve as both a security multiplier and a credibility-enhancing tool for EU enlargement. It concludes with concrete policy recommendations aimed at integrating Western Balkan defence industries into EU frameworks, improving regulatory alignment, fostering public–private partnerships, and strengthening strategic communication. In doing so, the brief reframes enlargement as a mutually beneficial, capability-building process essential to Europe’s long-term strategic autonomy.

You can read the policy brief here.

The South-East Europe Programme of ELIAMEP is a member of the IGNITA network, led by Open Society Foundations – Western Balkans.

Lying on the other side of the globe, at first glance the Indo-Pacific seems as remote to European interests as it gets. A more careful consideration beyond the geographical distance reflected on the map, however, paints a rather different picture. The growing interconnectedness of the European and the Indo-Pacific theaters in the security realm, as well as trade dependencies in strategic commodities, such as critical minerals and semiconductors, necessitate the formulation of a more intentional EU Indo-Pacific policy recognizing the region’s centrality in Europe’s defense and economic security. At the same time, acknowledging the structural limitations of the prospective engagement is equally important. The delicate state of affairs in Taiwan and the brinkmanship in the South China Sea should also be factored in. The United States has long called for its European partners to shore up their presence in the Indo-Pacific not least to support Washington in its regional bras-de-fer with China. Besides Washington’s own agenda, a flare-up in the Indo-Pacific will have far-reaching consequences for the EU partners, both financially and strategically. After mapping the European interests linked to the region, this paper will explore the ways in which the EU may tangibly shift some of its attention to the Indo-Pacific demonstrating why this is critical and what constraints it is bound to face in the process.

Read here in pdf the Policy paper by Vasilis Petropoulos, ELIAMEP Fellow.

Introduction

The Indo-Pacific is the geographical space extending roughly from the eastern coast of Africa to the Western coast of the Americas. It encompasses South Asia, Southeast Asia, East Asia, and Oceania. This region hosts more than half of the world’s population, accounts for 60% of global GDP[1], and is home to the busiest maritime trade routes, such as the Strait of Malacca, the Taiwan Strait and the East and South China seas, featuring contested security flashpoints.

For Europe, the Indo-Pacific is a space where economic interests, strategic dependencies, and global stability converge.

The region is also the site of an intensifying rivalry between the United States and China, whose outcome will largely shape the future of the international order. For Europe, the Indo-Pacific is a space where economic interests, strategic dependencies, and global stability converge. Approximately 40 percent of the EU’s foreign trade passes through the South China Sea[2], and European industries depend heavily on supply chains rooted in East and Southeast Asia. Export controls on rare earths, disruptions in semiconductor production in Taiwan or delays in shipping through the Strait of Malacca would reverberate across Europe’s economy. Beyond economics, a military escalation in the region could fracture the transatlantic alliance and divert U.S. strategic focus away from Europe, leaving the EU more vulnerable on its eastern and southern flanks. But even absent an armed confrontation in Taiwan, the Indo-Pacific is directly tied to Europe’s security through the unprecedented dynamics to which the ongoing war in Ukraine has strikingly given shape. With North Korean troops fighting alongside the Russian invaders and with China implicitly bankrolling the beleaguered Russian economy -thus enabling the perpetuation of the Kremlin’s war effort- the Indo-Pacific theater appears to gradually become embedded into the security architecture of the Old Continent. Hybrid threats originating in the Indo-Pacific, such as organized crime and irregular migration, complete the heap of security-related matters that tie Europe to the region.

Recognizing these interconnections, the EU ought to turn anemic engagement into tangible presence. In doing so, Europe must navigate internal divisions and resource constraints, while treading carefully the geopolitical minefield of the U.S.-China rivalry. The question is not whether Europe should engage in the Indo-Pacific, but how, and to what extent, it can pursue its engagement effectively.

Skin in the game

Economic Security

As already hinted, Europe’s economic prosperity is tightly bound to the Indo-Pacific. The region hosts four of the EU’s top ten trading partners, including China, Japan, South Korea, and India[3]. Further, key European exports (e.g. machinery, automobiles, and pharmaceuticals) flow eastward, while the EU imports a vast array of goods from Indo-Pacific countries. Two sectors epitomize this interdependence most prominently: semiconductors and critical minerals.

Semiconductors

The EU’s economic model is anchored in high-value manufacturing, advanced automotive production, and digital innovation. Maintaining the momentum in these fields hinges on securing an uninterrupted supply of semiconductors. Modern vehicles -particularly electric and hybrid models- integrate hundreds of chips[4] that control everything from engine management and battery systems to safety sensors and infotainment. Increasingly, the move toward autonomous and connected vehicles depends on higher-performance chips fabricated at advanced nodes. Further, advanced chips are the central components of data centers, 5G and forthcoming 6G networks, and industrial automation systems[5]. The defence industry, too, depends on reliable access to semiconductors for advanced military aircrafts, radar systems, satellite communications, and command-and-control platforms[6].

Foundries in Indo-Pacific countries account for the bulk of chip manufacturing worldwide.

Foundries in Indo-Pacific countries account for the bulk of chip manufacturing worldwide. Indicatively, the Taiwan Semiconductor Manufacturing Company (TSMC) produces more than 60% of the world’s semiconductors with a 71% market share and over 90% of the most advanced chips[7]. It is clear that a disruption to Taiwan’s semiconductor output would cascade directly into Europe’s supply chains resulting in production halts, escalating costs, and loss of competitiveness. It could also impede Europe’s digital transformation, compromise the rollout of critical communications networks, and affect sectors vital to national security. Semiconductors are dual-use technologies underpinning both civilian and military innovation. Therefore, any limitation in access to advanced chips would erode Europe’s technological sovereignty and strategic autonomy, leaving it reliant on the policy choices and geopolitical stability of other, non-Western actors. The graph below offers a visualization of Indo-Pacific’s dominance in global chip manufacturing.

Source: Ali Kamaly

 

Critical Minerals

Many of these minerals are mined or processed in Indo-Pacific countries, and the geographic concentration of production and refining adds a layer of systemic risk for Europe. […] While raw mineral deposits exist in many places, China has deliberately captured the downstream part of the value chain, which includes the refining, processing, separation and manufacturing of the final component.

The transition to a low-carbon, technologically advanced economy has placed critical minerals at the centre of EU’s industrial policy. Elements such as rare earths, nickel, cobalt, lithium, graphite and others form the backbone of batteries, electric vehicles (EVs), wind turbines, and advanced electronics. Many of these minerals are mined or processed in Indo-Pacific countries, and the geographic concentration of production and refining adds a layer of systemic risk for Europe. First, the role of China is pivotal. While raw mineral deposits exist in many places, China has deliberately captured the downstream part of the value chain, which includes the refining, processing, separation and manufacturing of the final component. For example, China accounts for about 65% of the world’s lithium refining capacity, over 70% for cobalt, and an astonishing 90% for rare earth minerals[8]. Second, Southeast Asia and other parts of the Indo-Pacific supply important raw and intermediate materials. For instance, Indonesia is the world’s largest producer of nickel, accounting for more than 50% of global nickel output in 2024 with Australia and New Caledonia also featuring in the list with the top ten global nickel producers[9]. The ASEAN Scoping Study on Critical Minerals Supply Chains found that Indonesia and the Philippines together account for approximately 72% of global nickel output and 14% of global cobalt output[10]. Crucially, these trends will continue to shape the critical minerals industry in the foreseeable future with Indo-Pacific (especially China) remaining at the epicenter. The tables below show projections about the dominant players in the six main critical minerals in 2030.

 

Table 1: Mining

Top 3 producers: #1, % #2, % #3, % Copper Chile, 23% DRC, 14% Peru, 10% Lithium Australia, 33% China, 23% Chile, 12% Cobalt DRC, 66% Indonesia, 10% Russia, 3% Rare earths China, 54% Australia,18% Myanmar, 9% Nickel Indonesia, 62% Philippines, 8% New Caledonia, 6% Graphite China, 82% Madagascar, 3% Mozambique, 2%

Source: IEA

 

Table 2: Processing/Refining

Top 3 processors: #1, % #2, % #3, % Copper China, 46% DRC, 7% Chile, 5% Lithium China, 57% Chile, 15% Argentina, 13% Cobalt China, 74% Finland, 6% Japan, 4% Rare earths China, 77% Malaysia, 12% Australia, 3% Nickel Indonesia, 44% China, 21% Japan, 6% Graphite China, 93% Japan, 3% U.S. 1%

Source: IEA

Because the supply chains for these minerals are globally interlinked, a disruption at any point (mining, refining, transport, processing) can severely undercut the EU’s environmental policies enshrined in the “Green Deal”.

Needless to say, the implications for Europe’s green transition are multifold. Europe is seeking to electrify transport, scale-up renewable energy and build digitally interconnected and resilient infrastructure (e.g., smart grids). Electrification means batteries. These in turn require nickel-rich chemistries (for higher energy density), cobalt (for stability in many chemistries), and graphite or other anode materials. Because the supply chains for these minerals are globally interlinked, a disruption at any point (mining, refining, transport, processing) can severely undercut the EU’s environmental policies enshrined in the “Green Deal”. Consider, for example, the battery value chain. The extraction may be in one country, but the ore is shipped to a refining complex in another country (often China) for conversion into battery-grade materials. The high degree of downstream concentration in one geography makes the supply chain vulnerable. Further, the OECD publication “The Role of Critical Minerals in Clean Energy Transitions” shows that China and Myanmar play dominant roles in processing, separation and downstream production of magnets, alloys and components[11]. From Europe’s perspective, this means that raw-material supply risks are not confined to mining. The biggest risk lies in the “mid‐stream” and “down‐stream” segments, that is, refining, separation, processing and fabrication of value‐added materials.

Because China maintains a tight grip on these segments, Europe and other jurisdictions are exposed to strategic bottlenecks. A mining source thousands of kilometers away becomes vulnerable if the processing plant is in China or if shipments must pass through geopolitical flashpoints in the Indo-Pacific. China’s preeminence in the strategic supply chains of critical minerals affords Beijing the opportunity to weaponize trade to pursue political ends. The placement of export controls on rare earths –a textbook measure taken by China in its bid to afflict the Western economies- has caused manufacturing disruptions, driving up prices and undermining the competitiveness of domestic products.

Similar to semiconductors, critical minerals are also irreplaceable for the European Defense Technological Industrial Base (EDTIB). Critical raw materials, such as graphite, cobalt, beryllium, and germanium are needed for the production of an array of weaponry, including fighter aircrafts, tanks, missiles, torpedoes, artillery, and ammunition, military hardware in which the EU strives to attain self-sufficiency. According to a risk assessment conducted by the Hague Centre for Strategic Studies[12], the supply of many of the aforementioned materials is very likely to incur disruptions due to instability or geopolitical bickering.

Military Security

The globalization of markets is what has made the Indo-Pacific indispensable to Europe’s economic security. The intensified great power competition reminiscent of Cold War era-style establishment of opposing blocks is what renders the Indo-Pacific vital to Europe’s hard security as well.

A military escalation in the Indo-Pacific, especially around Taiwan, would have immediate consequences for Europe by drawing U.S. attention and resources away from the Euro-Atlantic theater.

A military escalation in the Indo-Pacific, especially around Taiwan, would have immediate consequences for Europe by drawing U.S. attention and resources away from the Euro-Atlantic theater. If Washington were forced to reallocate strategic bandwidth to Asia, the EU would face greater pressure to shoulder the security burden on its eastern and southern flanks, where threats from Russia, instability in the Middle East, and irregular migration already test Europe’s resilience. Even without open conflict, developments in the Indo-Pacific increasingly shape Europe’s security landscape, as seen in the Ukraine war. North Korea’s provision of frontline troops and weapons to Russia, along with China’s economic lifeline that sustains Moscow’s war machine, demonstrates that actors in the Indo-Pacific can directly amplify threats to European stability.

Hybrid Threats 

Equally destabilizing for Europe are hybrid threats emanating from the Indo-Pacific region. The overseas territories of an EU powerhouse are turning into a springboard for irregular migration and organized crime. Criminal groups have established themselves[13] in the French Polynesia, New Caledonia, and the French West Indies engaging in drug trafficking, illegal fishing, gold smuggling, and arms flows as they exploit the vast exclusive economic zones where maritime surveillance is inadequate. These groups wield substantial control of international migration routes using the French territories as transit nodes for migration flows that ultimately reach Europe. Civil strife, climate change, political instability, and economic disparities in the Indo-Pacific exacerbate this trend. Once migrants enter a French territory, they are closer to gaining access to the European Union’s legal space, creating concerns that organized networks could exploit these territories as stepping-stones or “side doors” into Europe. Combined, these pressures increase border insecurity directly impacting Europe’s internal security.

This growing entanglement shows that Europe cannot compartmentalize the two regions. The Indo-Pacific is now woven into the continent’s security architecture, giving the EU undeniable “skin in the game” in preserving stability and building partnerships across the region.

Pinpointing the main hurdles 

To do so, the EU has to step up its involvement in the Indo-Pacific. In formulating its strategy for a more active engagement, Brussels should take into account the limitations it is destined to face.

…the EU’s Common Security and Defense Policy (CSDP) is not designed for distant power projection.

First, the EU’s Common Security and Defense Policy (CSDP) is not designed for distant power projection. Unlike the U.S., the EU lacks forward bases, logistical capacity, and naval assets suited for sustained Indo-Pacific operations. Any European military contribution would therefore be limited to symbolic deployments, joint exercises, or capacity-building missions.

Consensus-based decision-making and domestic political fragmentation across Europe also constrain the EU’s ability to act swiftly or decisively as a whole. Some member states, especially in Central and Eastern Europe, prioritize transatlantic solidarity and view China with suspicion; others, like Germany and Hungary, emphasize economic pragmatism appearing more conciliatory vis-à-vis Beijing due to their tight ties in trade and investments. Furthermore, defense spending disparities among member states hinder the formation of a unified strategic posture. So does the divergence in threat perception: Austria or Ireland might not view the threats stemming from the Indo-Pacific as immediate as they seem to France with its overseas territories or to the Baltic countries with an aggressive Russia on their borders- backed by Indo-Pacific actors.

Compounding to the constraining factors is China’s central role in European trade, which creates strong disincentives for confrontational policies.

Compounding to the constraining factors is China’s central role in European trade, which creates strong disincentives for confrontational policies. While the EU recognizes the risks of overreliance, especially after the pandemic and the Ukraine war, full-scale decoupling is neither feasible nor desirable. Consequently, the EU must pursue a policy of de-risking without disengaging, a pursuit requiring deft balancing that might sound straightforward in theory but can prove a herculean undertaking in practice even for the most experienced European bureaucrats.

Finally, Russia’s ongoing war in Ukraine consumes Europe’s attention and resources. Other challenges facing Europe, though, have not magically disappeared. The EU’s southern neighborhood grapples with persistent instability. Climate change, energy security, and migration pressures further stretch European capacities. In this context, sustained Indo-Pacific engagement risks being deprioritized unless directly linked to core European interests. Well-constructed and clearly communicated policy messaging on why the Indo-Pacific matters to Europe can serve in achieving the latter.

Rising to the challenge 

Despite these obstacles, Europe, both collectively and at national level, has taken some initial steps toward strengthening its presence in the Indo-Pacific.

The 2021 EU Strategy for Cooperation in the Indo-Pacific[14] marked a watershed. It framed the region as “vital for the EU’s interests” and called for cooperation in seven areas: sustainable and inclusive prosperity, green transition, ocean governance, digital partnerships, connectivity, security, and human security. The strategy’s ambition is evident in its breadth, yet its implementation remains uneven. Unlike the U.S., the EU lacks a hard-power footprint in the Indo-Pacific. The strategy is therefore designed around partnerships leveraging diplomacy, trade, and development tools rather than military presence. The EU Strategic Compass for Security and Defense (2022) sought to fix that. Recognizing the growing assertiveness of China in the Indo-Pacific and the strategic importance of the region to Europe, the strategic compass expanded the Coordinated Maritime Presences (CMPs) to the Indian Ocean while calling for more joint exercises and port calls in the Indo-Pacific with the aim to strengthen the EU regional presence.[15]

Beyond the collective front some EU member states have forged their own Indo-Pacific policies, contributing to a patchwork of European engagement. France maintains territories in the Indian and Pacific Oceans (La Réunion, New Caledonia, French Polynesia) and a permanent military presence. It views itself as an Indo-Pacific power and a natural anchor for EU engagement. Germany adopted “Policy Guidelines for the Indo-Pacific”[16] in 2020, emphasizing diversification of partnerships and a rules-based order. The Netherlands followed suit in 2020[17], focusing on trade and security cooperation. Italy and Spain are expanding defense dialogues with India, Japan, and ASEAN.

Given the vitality of the Indo-Pacific to the European economies and to the EU’s strategic autonomy writ large, the moment has come for Brussels to transform its hitherto timid engagement with the region into a vigorous and all-encompassing Indo-Pacific strategy.

Yet, coordination at the EU level remains limited. The EU Naval Mission Atalanta (operating in the western Indian Ocean) and joint exercises or port calls with partners like Japan and India represent embryonic steps toward a coherent European presence. On the other hand, initiatives, such as Global Gateway[18], promising €300 billion in sustainable investment, aim to enhance Europe’s soft power and support resilient infrastructure in the Indo-Pacific. However, questions remain about financing, coordination, and visibility compared to China’s extensive network of BRI projects. Given the vitality of the Indo-Pacific to the European economies and to the EU’s strategic autonomy writ large, the moment has come for Brussels to transform its hitherto timid engagement with the region into a vigorous and all-encompassing Indo-Pacific strategy.

The following policy recommendations aim to guide European policymaking in this direction:

• Maritime security

Maritime security represents the most practical entry point for upgraded European involvement; and probably the most instrumental one. Trade routes through the South China Sea and Indian Ocean function as Europe’s economic lifelines. The EU’s dependence on maritime security in these waters ties its prosperity to the stability of these distant sea lanes. Building on operations like Atalanta and AGENOR, the EU could expand naval patrols into the broader Indo-Pacific under a new Maritime Security Compact with ASEAN and regional partners within the framework of the EU Maritime Security Strategy (EUMSS). It could also reinforce the EU Coordinated Maritime Presences (CMPs) concept in the northwestern Indian Ocean and explore its extension to the western Pacific. Similarly, it can expand joint naval drills with Indo-Pacific partners both in geographical breadth and in scope. In particular, joint exercises may be conducted in more parts of the Indo-Pacific waters, while including training in war scenarios, red teaming, and breaking of potential naval blockades of critical sea lanes. Additionally, the EU could ramp-up investments in information-sharing mechanisms and capacity-building for regional coast guards. Such measures would not only safeguard critical trade routes but also demonstrate Europe’s commitment to free navigation and to a rules-based maritime order.

• Supply chain diversification

To reduce strategic dependencies, the EU should diversify semiconductor supply chains by strengthening partnerships with Taiwan, South Korea, and Japan, while supporting EU domestic chip production through the European Chips Act.

To reduce strategic dependencies, the EU should diversify semiconductor supply chains by strengthening partnerships with Taiwan, South Korea, and Japan, while supporting EU domestic chip production through the European Chips Act. Developing critical minerals partnerships with Indonesia, Australia, and India under transparent environmental and labor standards could also go a long way in feeding into Europe’s image as a global leader in sustainable development, while buttressing the diversification of the continent’s supply chains. A credible economic footprint would reinforce Europe’s relevance and complement its security engagement.

• Multilateralism and Diplomacy

Europe’s comparative advantage still lies in norm-setting and diplomacy. The EU should try to act as a mediating voice in U.S.-China tensions, emphasizing international law and open trade, while fostering regional crisis prevention initiatives, including confidence-building measures in the South China Sea. Regarding ASEAN, the EU may institutionalize the EU-ASEAN strategic dialogue with a permanent secretariat-level mechanism and build on the EU-ASEAN strategic partnership to revive sincere talks on a region-to-region free trade agreement, which will enhance integration and mutual economic resilience. Further, the EU would do well to upgrade the current format of talks from a ministerial to heads-of-state level dialogue. Such diplomatic activism would underscore Europe’s role as a stabilizing actor rather than a partisan power.

• Selected Bilateral Partnerships

The EU should deepen cooperation with established partners (Japan, India, Australia, and South Korea) and initiate partnerships with others through joint exercises, technology synergies, and joint research in critical technologies and cybersecurity. Triangular cooperation (e.g., EU-Japan-ASEAN infrastructure projects) could amplify impact while sharing burdens. A more robust presence would also send a message to China and North Korea that Europe is not a passive spectator of the latter’s intercontinental interference on Russia’s side in Ukraine. Rather, it will show that Europe can bring the competition to their own neighborhood, reinforcing its bargaining position. By strengthening the capacities of their own regional rivals while keeping channels of communication open, the EU can plausibly have a shot at persuading China and North Korea to dial down support to Moscow switching to a bold, but calculated, sticks-and-carrots approach.

• Leveraging NATO

While the EU should avoid duplicating NATO’s structures, closer coordination can align transatlantic and Indo-Pacific strategies. NATO’s 2022 Strategic Concept[19] already recognizes China as a systemic challenge. European contributions to Indo-Pacific security can thus complement, rather than compete with, Alliance objectives. For instance, enhanced interoperability between EU naval deployments and NATO partners in the region, along with coordinated sanctions and export-control regimes, can further reinforce collective deterrence.

Conclusion

The Indo-Pacific has emerged as a key node along the chain of the core European interests. Although pressing issues in its immediate neighborhood would not allow the EU to realize a “pivot to Asia” akin to that professed by the Obama administration back in 2011, the EU leadership would do well to formulate a holistic Indo-Pacific policy in its quest for strategic autonomy. Europe’s economic security largely rests upon intricate supply chains of strategic commodities, such as semiconductors and critical minerals. With upstream and downstream segments of these supply chains concentrated in Southeast Asia and even dominated by China, Europe is vulnerable to trade bottlenecks that can cause unmanageable setbacks in EU’s industrial production, green transition, and defense innovation. From a military perspective, the direct and indirect support of certain Indo-Pacific countries to Russia -namely North Korea and China- has laid bare the interconnectedness of the strategic theaters spanning the Eurasian supercontinent, while the Sino-American rivalry, if not tempered, risks to divert Washington’s resources away from Europe leaving the latter exposed to multiple threats. Expanding on the already existing cooperation mechanisms with Indo-Pacific countries and harnessing its central role in global diplomacy and multilateralism, the EU must prop-up its engagement in the region in its bid to safeguard the aforementioned interests. Coordination with NATO is also essential as the two distinct alliances work closely to achieve common goals in the Indo-Pacific complementing each other rather than going circles in an unproductive overlapping. Structural and systemic limitations may hinder deeper involvement, but the EU has the ability to navigate constraints to the degree that its Indo-Pacific engagement does not raise the risks of accentuating intra-EU divisions or exacerbating geopolitical tensions that might bring the region to the precipice of an armed confrontation.

[1] U.S. Department of State,” Indo-Pacific Strategy (2021–2025)”, 2021–2025, accessed November 2, 2025, https://2021-2025.state.gov/indo-pacific-strategy/.

[2] European External Action Service, “The EU Approach to the Indo-Pacific”, June 3, 2021, European External Action Service, accessed November 2, 2025, https://www.eeas.europa.eu/eeas/eu-approach-indo-pacific_en.

[3] European Parliament, “EU – Indo-Pacific Trade Relations (Hearing, INTA, 1 September 2022),” European Parliament Think Tank, September 1, 2022, accessed November 2, 2025, https://www.europarl.europa.eu/thinktank/en/events/details/eu-indo-pacific-trade-relations-/20220715CHE10501.

[4] Glenn Burm, “Semiconductor and beyond: Global Semiconductor Industry Outlook 2026”, PwC, 2025, 11–14, accessed November 10, 2025, https://www.pwc.com/gx/en/industries/technology/pwc-semiconductor-and-beyond-2026-full-report.pdf.

[5] Ibid. 16–20

[6] Sujai Shivakumar and Charles W. Wessner, “Semiconductors and National Defense: What Are the Stakes?” CSIS Commentary, June 8, 2022, accessed November 10, 2025, https://www.csis.org/analysis/semiconductors-and-national-defense-what-are-stakes. csis.org.

[7] David Sacks and Seaton Huang, “Onshoring Semiconductor Production: National Security Versus Economic Efficiency.” Council on Foreign Relations, September 27, 2022. Accessed November 10, 2025. https://www.cfr.org/article/onshoring-semiconductor-production-national-security-versus-economic-efficiency. Council on Foreign Relations.

[8] Elvire Fabry, “A looming war for minerals?”, Jacques Delors Institute, April 2023, Accessed 23 November, 2025 https://institutdelors.eu/en/publications/la-guerre-des-minerais-aura-t-elle-lieu-2/.

[9] Melissa Pistilli, “Top 9 Nickel-producing Countries”, INN, June 04, 2025, Accessed 23 November, 2025 https://investingnews.com/daily/resource-investing/base-metals-investing/nickel-investing/top-nickel-producing-countries/

[10]IGF on Mining, Minerals, Metals, and Sustainable Development, “The ASEAN Scoping Study on Critical Minerals Supply Chains”, ASEAN-IGF Minerals Cooperation, May 2023.

[11] OECD, “The Role of Critical Minerals in Clean Energy Transitions”, May 14, 2021.

[12] Benedetta Girardi, Irina Patrahau, Giovanni Cisco, and Michel Rademaker. 2023. Strategic Raw Materials for Defence: Mapping European Industry Needs. January, 2023.

[13] Secrétariat général de la défense et de la sécurité nationale (SGDSN), “Revue Nationale Stratégique 2025”, Paris, 2025, p.20.

[14] European Commission & European External Action Service. “Joint Communication on the EU Strategy for Cooperation in the Indo‑Pacific” JOIN(2021) 24 final. Brussels, September 16, 2021.

[15] Council of the European Union, “A Strategic Compass for Security and Defense”, 21 March, 2022.

[16] Federal Foreign Office (Germany), “Policy Guidelines for the Indo-Pacific”, Germany–Europe–Asia: Shaping the 21st Century Together”, Berlin: Federal Foreign Office, 2020.

[17] Ministry of Foreign Affairs, “Indo-Pacific: Guidelines for Strengthening Dutch and EU Cooperation with Partners in Asia”, Government of Netherlands, 13 November 2020.

[18] European Commission and European External Action Service, “Global Gateway: European Union Strategy for Sustainable Global Connectivity”, Brussels, 2021.

[19] North Atlantic Treaty Organization, “NATO 2022 Strategic Concept”, adopted at the Madrid Summit, 29 June 2022

 

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European External Action Service. The EU Approach to the Indo-Pacific. Brussels: European External Action Service, 2021.

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Burm, Glenn. Semiconductor and Beyond: Global Semiconductor Industry Outlook 2026. PwC, 2025.

Shivakumar, Sujai, and Charles W. Wessner. Semiconductors and National Defense: What Are the Stakes? CSIS Commentary. Washington, DC: Center for Strategic and International Studies, 2022.

Sacks, David, and Seaton Huang. Onshoring Semiconductor Production: National Security Versus Economic Efficiency, Council on Foreign Relations, 2022.

Fabry, Elvire. A Looming War for Minerals? Jacques Delors Institute, April 2023.

Pistilli, Melissa. Top 9 Nickel-Producing Countries. INN (Investing News Network), June 4, 2025.

Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF). The ASEAN Scoping Study on Critical Minerals Supply Chains. ASEAN–IGF Minerals Cooperation. May 2023.

Organisation for Economic Co-operation and Development (OECD). The Role of Critical Minerals in Clean Energy Transitions. Paris: OECD Publishing, 2021.

European Commission and European External Action Service. Joint Communication on the EU Strategy for Cooperation in the Indo-Pacific. *JOIN(2021) 24 final. Brussels, September 16, 2021.

Federal Foreign Office (Germany). Germany–Europe–Asia: Shaping the 21st Century Together. Policy Guidelines for the Indo-Pacific. Berlin: Federal Foreign Office, 2020.

Ministry of Foreign Affairs (Netherlands). Indo-Pacific: Guidelines for Strengthening Dutch and EU Cooperation with Partners in Asia. The Hague: Government of the Netherlands, November 13, 2020.

European Commission and European External Action Service. Global Gateway: European Union Strategy for Sustainable Global Connectivity. Brussels: European Commission, 2021.

North Atlantic Treaty Organization. NATO 2022 Strategic Concept. adopted at the Madrid Summit, 29 June 2022.

Girardi, Benedetta, Patrahau Irina, Ciscon Giovanni, and Rademaker Michel. Strategic Raw Materials for Defence: Mapping European Industry Needs. January 2023.

Council of the European Union.  A Strategic Compass for Security and Defense, 21 March 2022.

Secrétariat général de la défense et de la sécurité nationale (SGDSN). Revue Nationale Stratégique 2025. Paris 2025.

On the occasion of the recent full-day series of discussions on the evolving role of Europe as a space power, organized by ELIAMEP in collaboration with the Bertelsmann Foundation and Bertelsmann Stiftung Niki Karamanli, Defence & Security Researcher, AS Prote Maritime Ltd; Dimitris Kollias, ELIAMEP Research Fellow; Leopold Schmertzing, Non-Resident Fellow on Strategic Foresight, ELIAMEP and Varvara Vasilaki, Head of Technology Transfer Office & Programme Manager, Greek NATO DIANA Accelerator Site, NCSR ‘Demokritos’ assess how great-power competition, the commercialization of space, and European strategic priorities will shape the future of Europe as a space power. 

Niki Karamanli, Defence & Security Researcher, AS Prote Maritime Ltd

In an international system undergoing rapid transformation, with the New World Order once again in flux, the space race is intensifying and re-emerging as a critical instrument of power, influence, and strategic competition. The geopolitical landscape of space is increasingly defined by competition between established actors, such as the USA and Russia, and rising powers including China, India and Japan – states that could potentially function both as partners and as competitors for the European Union in exploration, technological development, and commercial exploitation. Yet within the accelerating contest, Europe risks falling short of securing a leading position.

Space has become a central arena of geopolitical and economic competition, shaping EU’s pursuit of strategic autonomy amid an increasingly contested global environment. Looking toward 2050, foresight points to a future in which space is highly probable to evolve as a battlefield marked by militarization and anti-satellite capabilities. Great power competition in space has re-politicised space as a domain of power, deterrence, and influence. For Europe this raises a fundamental challenge as regard to whether it remains a largely civilian and normative space actor, or whether strategic autonomy pushes it toward greater security and defence integration in space. Considering that the future operating environment is likely to be more contested, congested, and competitive, making resilience and protection of space assets central concerns seem to be a one-way road for Europe.

Therefore, it is safe to argue that it is the navigation of these uncertainties by shaping a set of interlinked strategic priorities constitute Europe’s strategic challenge. Specifically, technological sovereignty is essential to reduce structural dependencies on non-European launch systems, components, hardware, data infrastructure, especially as space becomes gradually more security-critical. Closely linked to this is also strategic autonomy, which requires Europe not only to access space independently, but to retain decision-making control over critical space service in dual-use and civilian contexts as well. However, to achieve this demands leaner governance and faster decision-making cycles, as current excessive bureaucracy and fragmented institutional processes continue to delay innovation and weaken Europe’s competitiveness vis-à-vis more agile global actors.

At the same time, increased and more targeted investment is needed to scale European space companies and bridge the gap between research, demonstration, and commercial deployment. It is vital for policies to prioritise strengthening the internal European space market, enabling public procurement of innovation, and cross-border collaboration between industry, startups, and research institutions. Supporting resilient and secure supply chain across space technological ecosystems from launch and manufacturing to data and downstream applications will be critical to mitigating geopolitical and economic risks.

As space re-emerges as a key domain of power, security and technological influence, Europe finds itself at a strategic crossroads. Without greater coherence and long-term commitment, the Union risks remaining a spectator in a contest that will shape the future distribution of power in the international system and as the German Defence Minister Boris Pistorius has cautioned, space will indeed be Europe’s Achilles heel.

Dimitris Kollias, Research Fellow, ELIAMEP

Great-power competition is turning space into a decisive theatre of hard security. The US, China and Russia are developing military and counterspace capabilities, while the war in Ukraine has shown how cyber-attacks on satellites and dependence on foreign commercial constellations can directly shape outcomes on the ground. For the EU, this means that space capabilities and active participation in the space arena are not a luxury but arguably the last chance to build the foundations of strategic autonomy, in what is the next (and probably, literally, final) frontier.

Space commercialisation sharpens this imperative. NewSpace constellations have provided services that Europe could not rapidly supply itself, but they also lock Europeans into strategic dependence on non-EU operators and launchers. In Ukraine, battlefield connectivity and intelligence were influenced not only by national alliances but also by the inclinations of tech executives in California boardrooms. This illustrates a “technopolar age” in which corporate infrastructures wield quasi-sovereign power. The Union’s emerging answer (Galileo and Copernicus, the secure connectivity constellation IRIS², EU Space Surveillance and Tracking, and ESA’s European Resilience from Space) sketches the core of a defence-relevant, dual-use “system of systems” underpinned by an EU Space Strategy for Security and Defence and a prospective EU Space Act.

The real question is integration. Space is geopolitically and geoeconomically bigger than any member state, yet defence remains nationally guarded. Precisely here lies the opportunity: unlike many defence projects, Europe’s space programmes have a history of close cooperation, technical success and very little “bad blood”. If the EU can use this record to move from fragmented assets to an integrated preparedness architecture, space could become the catalyst that finally aligns industrial policy, defence planning and regulation, and with it, Europe’s last realistic window to shape its own strategic destiny.

Leopold Schmertzing, Non-Resident Fellow on Strategic Foresight, ELIAMEP

From my vantage point as a security, defence, and foresight analyst with a keen interest in space, Europe’s role as a space power will be decided by the outcome of two key uncertainties.

The first uncertainty is external. The easiest way to push Europe into becoming a space power would be external attempts to intimidate and isolate it.

If the United States continues to diverge politically and culturally from Europe to a point where Europeans can no longer assume reliable access to U.S. military space assets and launch capabilities, Europe will have little choice but to accelerate its own. Existing “complementary” programmes would need to be transformed into stand-alone systems capable of operating without transatlantic backstopping.

A similar logic applies to Russia and China. While scenarios involving internal collapse or democratic transformation are theoretically possible, they remain highly unlikely. A more plausible trajectory would be continued totalitarian radicalisation. In such a scenario, Europe would face sustained competition in space with actors that possess significant technological capabilities and, in some areas, knowledge advantages.

The second uncertainty is internal. Europe’s ability to act depends on whether it can overcome its deeply fragmented defence and space sectors. Both remain highly nationalised, closely tied to sovereignty, prestige, and domestic industrial bases. As a result, rising demand tends to produce higher prices and duplication rather than scale and output.

Europe does not need to replicate the U.S. model exemplified by SpaceX, nor China’s state-centric approach. In principle, it could build competitive capability through coordinated ecosystems of startups, SMEs, and prime contractors; producing in many places at once while acting strategically as integrated alliances. This path, however, requires politically difficult choices like pooling sovereignty and prioritising collective capability over national visibility.

Varvara Vassilaki, Head of Technology Transfer Office & Programme Manager, Greek NATO DIANA Accelerator Site, NCSR ‘Demokritos’

Europe’s future as a space power will be shaped by its capacity to translate scientific excellence and frontier technologies into deployable, scalable capabilities. Great-power competition is accelerating innovation in sensing, communications, autonomy, cybersecurity, and advanced materials — domains with inherently dual-use potential. In this context, preserving strategic autonomy and ensuring resilient access to critical technologies will strengthen Europe’s position in an increasingly competitive global landscape.

At the same time, the rapid commercialisation of space is transforming how innovation reaches end users. Deep-tech start-ups now play a central role in launch services, satellite systems, advanced components, and in-orbit operations. Test centres and experimentation facilities — including those embedded in research organisations — are becoming essential enablers, providing realistic environments where new technologies can be validated and demonstrated. Europe can further unlock this potential through mission-driven funding instruments and dual-use innovation pipelines such as the European Union Defence Innovation Scheme (EUDIS) and the NATO Defence Innovation Accelerator for the North Atlantic (DIANA). These initiatives illustrate how structured programmes, combined with access to trusted testing and evaluation facilities, can support the transition of promising technologies from research to deployable capabilities.

Europe’s strategic priorities — secure connectivity, space situational awareness, resilient supply chains, climate monitoring, and defence preparedness — call for continued coordination and sustained investment. By fostering an enabling environment that empowers research centres, innovators, test facilities, and industrial partners to scale deep technologies effectively, Europe can reinforce its leadership and actively shape the evolution of the global space ecosystem. Europe’s commitment to excellence, collaboration, and innovation will be a defining factor in its trajectory as a space power.

• The European Parliament that emerged after the June 2024 elections is characterized by a high level of diversity and fragmentation.
• More than 200 national and transnational parties are represented, with more than one third of the Members of the European Parliament (MEPs) belonging to very small political parties, with one to three representatives, or have no party affiliation. Ten national parties gather 204 MEPs, dominating political interactions in the EP environment.
• The observed fragmentation enhances diversity and pluralism but also undermines the formation of stable political and ideological networks and coalitions.
• The EPP, the S&D, and Renew, together with the Greens at some (small) distance, form the cluster of the ‘governing majority’. ESN and PfE are located far away from this first cluster. The European Left and the ECR have an intermediate position, showing thematic flexibility and an occasional, selective ad hoc convergence with either cluster in different votes.
• S&D is the most cohesive political group in the EP, followed by the EPP and the RENEW group that also show a high level of cohesion. Large deviations in the voting patterns of their constituent members exist in the ECR and PfE groups.
• Combining our findings with the ones of the Chapel Hill Expert Survey (CHES) on the ideological positions of the EP political groups, we find that the groups’ positions on European integration explain voting alignment better than ideology does. This reinforces a key literature insight that European integration has become perhaps the most influential cleavage in the EP politics — one that increasingly structures legislative behaviour beyond the traditional Left–Right divide.

Read here in pdf the Working paper by Antonis Papakostas, former EU official; Research Associate, ELIAMEP; Spyros Blavoukos, Professor, Athens University of Economics and Business; Senior Research Fellow and Head of the ‘Ariane Condellis’ European Program, ELIAMEP and Georgios Matsoukas, Research Assistant, ELIAMEP.

 

The Transatlantic Periscope is an interactive, multimedia tool that brings together expert commentary, high-quality media coverage, official policy documents, quantitative data, social media posts, and gray literature. It will provide on a monthly basis a summary of the most important news concerning the Greek-US relations, as reflected in the media. Below you will find an overview for October 2025.

On October 2, Kimberly Guilfoyle begun her first official contacts as the new U.S. Ambassador to Greece. The Ambassador visited her Greek counterpart in Washington, D.C., Ambassador Katerina Nasika. According to SKAI, Guilfoyle outlined her plans for Greece, while the Greek Ambassador appeared satisfied with the meeting.

Greece participated in the Association of the United States Army (AUSA) Annual Meeting & Exposition, with a dedicated Hellenic Pavillion, under the auspices of Enterprise Greece and the Hellenic Ministry of National Defense, in collaboration with the American Hellenic Chamber of Commerce. As part of the AUSA Exposition, a high-level event entitled “Investing in Europe’s Defense Future: Opportunities and Innovation in Greece” was held on October 14. The event brought together industry leaders, defense experts, and stakeholders to explore Europe’s evolving defense landscape, with particular emphasis on Greece’s pivotal role in strengthening its defense capabilities. Distinguished speakers, including senior officials from the Hellenic Ministry of National Defense and representatives from U.S. and Greek defense industries, engaged in in-depth discussions on the shared challenges facing European and U.S. defense sectors, highlighting opportunities for enhanced understanding and cooperation.

The Chief of the Hellenic Navy, Vice Admiral Dimitrios Eleftherios Kataras, participated in the commemorative events marking the 250th anniversary of the United States Navy in Philadelphia, Pennsylvania, from 7 to 13 October 2025, where he held meetings with senior U.S. officers, following an invitation from his counterpart, Admiral Daryl Caudle, Chief of Naval Operations of the United States. On October 16, Minister of National Defence of Greece, Nikos Dendias, visited the U.S. Naval War College in Rhode Island. During his visit, the Minister of Defense held discussions with the President, Rear Admiral Darryl Walker, and senior officials of the U.S. Navy.

Finance Minister Kyriakos Pierrakakis met U.S. Treasury Secretary Scott Bessent on the sidelines of the International Monetary Fund (IMF) meetings on October 17, for the second time in six months. During the meeting they reaffirmed the relationship of trust and strategic cooperation between Greece and the United States. Secretary Bessent and Minister Pierrakakis also stressed the need for cooperation on national security issues. Pierrakakis presented Greece’s progress in fiscal stability and investment attraction, and underlined the need to further deepen the economic partnership between Greece and the United States, particularly in the fields of technological innovation and energy infrastructure.

More at: https://transatlanticperiscope.org/relationship/GR#

• The AKP–MHP alliance has built a form of hegemonic authoritarianism that is not based on repression alone. It combines control over state institutions (judiciary, bureaucracy, security apparatus, media) with deep alignments to conservative–nationalist social bases and newly-enriched economic groups, creating a durable state–society block.
• The Kurdish question is simultaneously indispensable and explosive for the opposition. Without Kurdish electoral and discursive support, a change in power is nearly impossible; yet open cooperation with Kurdish parties risks alienating nationalist voters, especially those in and around the IYI Party, and is easily framed by the government as “terror collaboration” under the “Terror-free Turkey” and security narrative.
• The economy has shifted from being the AKP’s core asset to its main liability, but this has not automatically translated into opposition advantage. High inflation, collapsing real wages and middle-class erosion are undermining the regime’s social contract, yet clientelist networks, selective social assistance and media control still prevent economic discontent from consolidating into a stable opposition majority.
• The CHP and the İYİ Party suffer from persistent leadership, cadre, and programmatic weaknesses that prevent them from converting regime vulnerabilities into a credible alternative. Although Ekrem İmamoğlu is arguably the opposition’s most charismatic and electorally competitive figure, his imprisonment has removed him from the national stage at a critical moment, creating a profound leadership vacuum. Özgür Özel, despite his constructive political style and rising public recognition, has not yet reached Erdoğan’s level of charismatic authority or nationwide resonance. Mansur Yavaş, meanwhile, remains an ambivalent national actor: his popularity is undeniable, but his reluctance to openly seek national leadership prevents him from anchoring a coherent opposition strategy. At the same time, neither the CHP nor the İYİ Party has consistently cultivated young, technocratic, socially-diverse elites or articulated clear, persuasive positions on foundational issues – including the economy, foreign policy, and especially the Kurdish question. As a result, the opposition remains structurally fragmented and strategically incoherent, unable to project itself as a confident and united governing alternative.
• In the short term, electoral breakthroughs remain possible, but structural transformation is hard without a bolder, inclusive democratic project. Lasting change would require moving beyond purely tactical electoral alliances towards a programme that tackles institutional reconstruction; seeks to bolster the rule of law, transparency and centre–periphery relations; and reframes the Kurdish question within an inclusive, citizenship-based vision – points the opposition has so far struggled to articulate.

Read here in pdf the Policy Paper by Ahmet Erdi Öztürk, Non-Resident Senior Scholar, Turkey Programme, ELIAMEP.

Introduction

Over the past two decades, Turkey has moved from being treated as a difficult but promising candidate for democratic consolidation to being widely described as a paradigmatic case of “competitive” or “hegemonic” authoritarianism (Esen and Gümüşçü 2016; Özbudun 2015; Baser and Ozturk 2017; Akkoyunlu and Oktem 2018). The Justice and Development Party (Adalet ve Kalkınma Partisi, AKP), in power since 2002, has gradually transformed the institutional and normative foundations of the Turkish political system. What began as a reformist and pro‑European conservative party evolved into a dominant actor presiding over a highly-centralised presidential regime, tightly-controlled media, politicised bureaucracy and dense networks of neo‑patrimonial distribution. Especially since the 2013 Gezi protests, the 2015–16 conflict cycle in the southeast, and the failed coup attempt of July 2016, the AKP – in alliance with the Nationalist Action Party (Milliyetçi Hareket Partisi-MHP) – has consolidated a new political order in which electoral competition persists but takes place on a profoundly uneven playing field.

At the same time, this transformation has profoundly constrained the space in which the opposition can operate. Parties, movements and individual politicians critical of the AKP–MHP bloc face continuous legal and administrative pressure: criminal investigations, prosecutions on terrorism-related charges, the removal and detention of elected mayors, bans on political activity, and the routine targeting of journalists and activists have become part of the repertoire of governance. When opposition actors attempt to replicate instruments long monopolised by the ruling coalition – for example, building dense local patronage networks, mobilising through religious or neighbourhood associations, or articulating alternative security discourses – they often encounter swift repression and delegitimisation by state institutions aligned with the executive. In this sense, the opposition is expected to compete under rules that are neither clear nor consistently enforced, in a context where the “referee” is also a player. Yet the difficulty of the environment does not fully absolve opposition parties of responsibility. Their chronic fragmentation, recurrent leadership crises, inadequate intra-party democratisation, and frequent reliance on short-term electoral bargains rather than long-term programmatic renewal all contribute to their limited capacity to convert regime vulnerabilities into a credible governing alternative.

The ruling bloc also benefits from significant structural advantages inside the state apparatus and from enduring support among important social constituencies. 

Under the given realities, this policy paper examines the dilemmas, opportunities and weaknesses of the Turkish opposition under conditions of hegemonic authoritarianism. It proceeds from two core assumptions: First, that the resilience of AKP–MHP rule cannot be understood solely through reference to coercion, clientelism or institutional manipulation. The ruling bloc also benefits from significant structural advantages inside the state apparatus and from enduring support among important social constituencies. The opposition, in other words, is confronted not only by an authoritarian incumbent but also by an entrenched societal and bureaucratic alignment that makes alternation in power exceedingly difficult. But second, that these structural advantages coexist with growing vulnerabilities: a deteriorating economic record, deepening social inequalities, the erosion of public services and mounting dissatisfaction with the quality of governance. These failures potentially create openings for opposition parties, but only if they can respond with credible leadership, programmatic clarity and organisational capacity.

The paper focuses on the two principal opposition forces: the Republican People’s Party (Cumhuriyet Halk Partisi, CHP) and the Good Party/IYI Party (İYİ Parti). Although İYİ Parti does not command a very large share of the vote, it plays a significant role by maintaining its own parliamentary group and, particularly during election periods, demonstrating an ability to aggregate and represent segments of the nationalist electorate under its organisational umbrella. This analytical choice is not meant to downplay the importance of other actors – most notably the pro-Kurdish left mobilised around the Peoples’ Equality and Democracy Party (Halkların Eşitlik ve Demokrasi Partisi, DEM), as well as smaller conservative or centre-right formations – but reflects the specific objective of assessing the capacity to generate a credible, nationwide alternative governing bloc under conditions of hegemonic authoritarianism. In particular, the recent “Terror-Free Turkey” (Terörsüz Türkiye) discourse, and the accompanying securitisation of Kurdish politics, have further constrained DEM’s room to operate as a “classic” opposition party, pushing it towards a more defensive, survival-oriented stance and heightening its distance from the institutional core of the opposition camp. By contrast, in electoral and institutional terms, the CHP and the IYI Party now constitute the core of a ‘systemic’ opposition: they are represented across the country, they lead or co-lead key municipal administrations (most prominently in Istanbul and Ankara), and they have been the primary architects and public faces of broad opposition alliances such as the Nation Alliance and the “Table of Six”. As parties whose organisational structures, ideological profiles and leadership cadres are oriented towards capturing the executive at the national level, they occupy a structurally different position from actors whose strategic horizon is more explicitly movement-, identity- or region-based.

In this landscape, it is also important to note the position of the Kurdish political movement, where Selahattin Demirtaş has long stood out as the most resonant opposition figure. Among younger generations, progressive circles, and segments of the broader democratic public, Demirtaş enjoys a level of moral authority and popular appeal far exceeding that of Abdullah Öcalan in the contemporary moment. However, a combination of structural constraints has prevented Demirtaş from functioning as a fully active pole of attraction within the opposition field. His ongoing imprisonment since 2016, coupled with an environment shaped by the opaque bargaining dynamics surrounding the “Terror-Free Turkey” process, has significantly limited his ability to articulate an alternative political vision or to participate directly in coalition-building efforts. As a result, despite his symbolic centrality and potential to broaden the opposition’s social reach, the Kurdish movement’s most charismatic political figure has been relegated to a constrained, mediated form of influence – further complicating the prospects for constructing a cohesive, cross-cleavage opposition bloc capable of challenging hegemonic authoritarian rule.

The CHP remains the only opposition party with a realistic claim to forming a government on its own or leading a broad coalition, whereas the İYİ Parti – despite having no viable prospect of winning national power independently – retains significant influence through its ability to aggregate and mobilise nationalist constituencies.

The CHP and İYİ Parti are the opposition actors most directly interpellated by domestic audiences as potential “governments-in-waiting”, though they do not occupy identical positions within the opposition field. The CHP remains the only opposition party with a realistic claim to forming a government on its own or leading a broad coalition, whereas the İYİ Parti – despite having no viable prospect of winning national power independently – retains significant influence through its ability to aggregate and mobilise nationalist constituencies. Its parliamentary group, organisational reach among segments of the centre-right, and capacity to shape nationalist sensitivities within opposition blocs make it an important, agenda-setting actor even without the numerical strength to contend for executive office alone.

The IYI Party’s roots in MHP tradition and its long-standing ties to the security bureaucracy mean that, in an eventual alternation of power, it is widely perceived as more able – and in some respects more willing – to work with existing state cadres and within institutional reflexes. Its opposition is thus framed primarily against the current political duo of President Recep Tayyip Erdoğan and the leader of MHP, Devlet Bahçeli, rather than against the deeper continuities of the state apparatus. By contrast, the CHP under Özgür Özel’s leadership, and with figures such as Ekrem İmamoğlu at its symbolic centre, is increasingly signalling an ambition to reconfigure state personnel and practices more substantially, especially at the mid- and upper-bureaucratic levels. This makes the CHP the core carrier of a more transformative opposition project. Both parties are nonetheless expected, unlike smaller or more specialised actors, to demonstrate governing competence across the full spectrum of policy domains: economic management, foreign and security policy, state administration, social policy and the rule of law. Their organisational choices (candidate selection, resource distribution, branch-building), leadership profiles (credibility, visibility, resilience), and programmatic (in)clarity on core issues such as the economy, the Kurdish question and Turkey’s international alignment therefore carry disproportionate weight in shaping perceptions of whether a transfer of power is both possible and desirable.

By concentrating on the CHP and the IYI Party, the paper can more precisely interrogate the distinct mechanisms through which opposition weakness and fragmentation are reproduced at the level of party organisation and strategy, while still situating these dynamics in relation to other opposition actors – above all, the HDP and its successors – whose inclusion in, or exclusion from, broader coalitions remains one of the central structural dilemmas facing any project of political change in contemporary Turkey.

AKP–MHP Hegemony: Structural Advantages at Home and Abroad

From a domestic perspective, the ruling coalition now enjoys three interlocking sets of advantages: control of key levers of the state and bureaucracy; deep embeddedness in conservative, religious and nationalist constituencies; and an ability to construct and sustain existential security narratives around both domestic dissent and regional crises.

The endurance of AKP–MHP rule rests on a complex combination of electoral strength (Aylan Musil 2024), institutional capture (Yesil 2018) and discursive hegemony (Gurpinar 2022), but it is also shaped by the evolving interests of the two partners. Historically, the AKP and MHP emerged from different ideological and sociological traditions; yet over time, the AKP’s drive to remain in power and its progressive “statisation” (devletleşme) (Yavuz 2020) have dovetailed with the MHP’s long-standing aspiration to anchor itself within the core state apparatus and security bureaucracy (Yavuz 2002). The result is not so much a principled ideological convergence as a largely interest-driven pact over control of the state and its coercive and administrative capacities. From a domestic perspective, the ruling coalition now enjoys three interlocking sets of advantages: control of key levers of the state and bureaucracy; deep embeddedness in conservative, religious and nationalist constituencies; and an ability to construct and sustain existential security narratives around both domestic dissent and regional crises. These narratives, articulated through the idioms of survival (beka) (Adisonmez and Al 2024) and national unity, help to legitimise the asymmetric distribution of power within the political system and to normalise the fusion of partisan and state interests that underpins the current governing bloc.

First, the AKP’s long tenure has allowed it to remake the state apparatus while preserving a high degree of coalition flexibility for President Recep Tayyip Erdoğan. Successive constitutional and legal reforms – most notably in 2010 and 2017 – have concentrated decision-making in the presidency and expanded executive leverage over the judiciary, higher courts, regulatory agencies and the civil service. At the same time, the leadership has cultivated an informal, shifting majority that rests on a blend of material patronage (Oyvat, Tekguc and Yagci 2025), shared conservative–nationalist worldviews and ad hoc bargains with different segments of the bureaucracy, business community and subnational elites. Key posts in the security sector, provincial administration and state-linked economic institutions are occupied not only by formal party loyalists, but by actors whose careers and protection depend on alignment with President Erdoğan’s personal authority (Keskin 2020) and the continuity of the broader governing project. This produces a state structure that is simultaneously personalised and coalition-capable: the centre can reconfigure alliances within the conservative–nationalist and state elite spectrum without relinquishing control. For opposition forces, therefore, alternation in power would require more than an electoral victory; it would entail confronting an administrative and politico-economic ecosystem whose habits, expectations and incentive structures have been calibrated around Erdoğan’s long incumbency and the informal coalitional architecture that sustains it.

Secondly, the AKP–MHP alliance continues to command strong support among diverse but overlapping social constituencies: segments of the conservative Sunni middle and lower-middle classes; parts of the business community benefiting from public procurement, municipal contracts and politically-mediated credit; nationalist voters for whom territorial integrity and state strength trump procedural concerns; and dependent poor who are embedded in networks of social assistance and religious-communal solidarity (Ozdemir 2020). To this must be added a relatively new stratum that has emerged over the last two decades: upwardly mobile, often provincially-rooted groups with comparatively low formal educational attainments, whose social rise has been closely intertwined with AKP-era economic expansion, construction-led growth and access to state-linked opportunities. For these constituencies, regime continuity is not only an ideological preference; it is also a guarantee of status preservation and further mobility. The ruling coalition’s capacity to articulate a narrative of “national will”, religious authenticity and external besiegement allow it to speak simultaneously to these material interests and to long-standing symbolic grievances vis-à-vis secular, urban and “Westernised” elites (Bilgic 2018). Even during acute economic downturns and corruption scandals, such narratives help sustain loyalty or at least acquiescence among broad swathes of voters, particularly in Anatolian provinces, conservative metropolitan districts and newly-enriched peri-urban belts.

Thirdly, the AKP–MHP bloc has constructed a security discourse in which the boundary between “internal” and “external” threat is deliberately blurred and increasingly meaningless (Sandal and Ozturk 2023). Domestic opposition, Kurdish political demands, refugee politics, great-power competition and regional conflicts are woven into a single, composite narrative of siege and vulnerability. The post-2015 re-securitisation of the Kurdish question, the militarisation of Turkey’s Syria and Iraq policies, and persistent references to “foreign plots” behind economic turbulence or protest episodes all contribute to a climate in which internal dissent is easily coded as an extension of external hostility (Ozturk 2021). In this framing, stability and a strong centralised executive are elevated as the highest public goods, while opposition calls for democratisation, power-sharing or reconciliation can be portrayed as naïve at best and subversive at worst. The effect is amplified by the government’s near monopoly over mainstream television and much of the print media, and its growing capacity to shape digital spaces through regulation, surveillance and informal pressure. In such a mediated environment, security becomes a holistic register that fuses inside and outside, making it harder for opposition actors to articulate alternative visions without triggering fears of strategic vulnerability.

AKP rule has also benefited from international conditions that have reduced the costs of authoritarian consolidation.

From an external perspective, AKP rule has also benefited from international conditions that have reduced the costs of authoritarian consolidation. The European Union’s internal crises and its preoccupation with migration management have weakened its willingness and capacity to exercise normative leverage over Ankara. The Syrian civil war and subsequent refugee flows have transformed Turkey into a pivotal partner for the EU, enabling the government to use the “migration card” as a bargaining chip in negotiations and to shield itself from harsher criticism (Gokalp Aras 2019). At the same time, the gradual move towards a more multi-polar international order – marked by the rise of China, the renewed assertiveness of Russia and the growing importance of Gulf capital – has allowed Ankara to diversify its foreign policy and economic dependencies. Access to alternative sources of finance, investment and diplomatic support reduces the regime’s vulnerability to Western pressure and enables it to play external actors off against one another (Öniş and Kutlay 2017).

These domestic and international advantages combine to create a particular type of hegemonic authoritarianism: one that is anchored in a socially rooted, nationalist‑conservative coalition, backed by a disciplined and loyal bureaucracy, and buffered by a regional and global environment that rewards security cooperation and transactional bargaining more than liberal democratic reform. For the opposition, this implies that the challenge is not limited to contesting elections under unfair conditions: it must also confront deeply embedded structures of power, identity and interest.

The Kurdish Question and the Limits of Opposition Coalitions

The result is a paradoxical moment in which a cautious opening by the governing bloc intersects with a fragmented and ambivalent opposition field; rather than capitalising on the new space, the opposition risks being caught off-balance, with its internal divergences on the Kurdish question and regional policy exposed precisely at a time when Kurdish electoral behaviour and regional realignments remain decisive for the future of Turkey’s political order.

The Kurdish question occupies a central place in this configuration of power and constraint, but it has not always been inscribed in the same way in Turkey’s political calculus. Historically, Kurdish votes have often held a pivotal, king-making position in tightly contested elections, forcing governments and opposition alike to think in terms of coalition geometries rather than simple bloc politics. The AKP’s own trajectory on the Kurdish issue – from cautious cultural openings and the “solution process” of the 2010s to hard securitisation after 2015 – reflects the shifting interplay between electoral incentives, coalition needs and regional conflict dynamics (Ozpek 2018). Since 2024, however, developments in Syria and a reconfiguration of US Middle East priorities under Trump’s renewed regional vision have begun to alter the strategic landscape, creating pressures and opportunities for a partial recalibration. The AKP–MHP coalition has tentatively explored a more flexible line, seeking room for manoeuvre without formally abandoning its security-centred discourse. In this context, the CHP and IP have adopted distinct stances: especially under the emerging leadership profile of figures such as Özgür Özel and Mayor of Istanbul Ekrem İmamoğlu, the CHP has signalled a more rights-based, citizenship-oriented approach, whereas IYI Party’sMHP origins and closer affinity with traditional state-security reflexes have inclined it toward a more restrictive position. The result is a paradoxical moment in which a cautious opening by the governing bloc intersects with a fragmented and ambivalent opposition field; rather than capitalising on the new space, the opposition risks being caught off-balance, with its internal divergences on the Kurdish question and regional policy exposed precisely at a time when Kurdish electoral behaviour and regional realignments remain decisive for the future of Turkey’s political order.

In its early years, the AKP pursued a strategy that combined limited cultural recognition with developmentalist promises in the predominantly Kurdish southeast. This approach, coupled with the party’s distance from the secular‑nationalist establishment, allowed it to attract significant Kurdish electoral support and to weaken the hold of traditional nationalist parties. The 2013–15 “resolution process”, though opaque and ultimately unsuccessful, represented the most serious attempt in the history of the republic to address the armed dimension of the Kurdish question through negotiation. Yet the collapse of this process – amid mutual mistrust, regional spillovers from Syria and shifting electoral incentives – paved the way for a dramatic re‑securitisation. The return to armed conflict in 2015, urban warfare in the southeast and the criminalisation of the HDP reconfigured the political landscape.

For the AKP–MHP bloc, the post-2015 environment brought clear and immediate advantages, but did so by pushing Turkish politics into an exceptionally securitised phase. The convergence of renewed PKK violence, the collapse of the peace process, the Syria war and the post-coup state of emergency allowed the government to weave together a broad “anti-terror” and “survival” narrative that reached far beyond its core electorate. This discourse resonated not only with different strands of Turkish nationalism, but also with security-oriented constituencies within the bureaucracy, the armed forces and parts of the urban middle classes. In practice, it blurred the line between armed militancy, legal Kurdish politics and wider dissent, placing Kurdish actors and other opposition forces under a shared umbrella of suspicion and pressure. At the same time, this high-intensity securitisation fractured potential opposition coalitions by hardening the cleavage between Kurdish-oriented parties and Turkish nationalist actors, making any durable Kurdish–Turkish opposition alignment both politically costly and easily stigmatised. Yet, as the 2019 municipal elections showed, such alignment is a necessary (if fragile) condition for seriously challenging AKP–MHP dominance at the ballot box. The governing bloc’s strategy has therefore been to pre-empt and delegitimise precisely this kind of cross-cleavage cooperation by reframing it as collaboration with terrorism, thereby locking Kurdish voters into a double bind and constraining other opposition parties’ room for manoeuvre under an ever-present security shadow.

For the opposition, the Kurdish question thus presents a deep and enduring dilemma. On the one hand, without Kurdish support – both electoral and discursive – it is extremely difficult to assemble a coalition capable of winning national-level power. 

For the opposition, the Kurdish question thus presents a deep and enduring dilemma. On the one hand, without Kurdish support – both electoral and discursive – it is extremely difficult to assemble a coalition capable of winning national-level power. On the other hand, overt cooperation with Kurdish parties risks alienating nationalist voters, particularly those inclined towards the IYI Party or the CHP’s more security-sensitive segments. This tension has repeatedly led opposition leaders to adopt deliberately ambiguous or evasive positions, whereby they seek to maximise tactical coordination with Kurdish actors (especially at the local level and in second-round presidential contests), while avoiding clear programmatic commitments on core Kurdish demands such as decentralisation, mother-tongue education, constitutional recognition or the release of political prisoners. In practice, this ambiguity has sharply limited the transformative potential of opposition coalitions. What might, under different conditions, look like a shared project of democratisation and conflict transformation is reduced to a narrowly-instrumental electoral arrangement which is permanently vulnerable to government wedge-driving, criminalisation campaigns and media-fuelled moral panics.

By 2025, this dilemma has hardened into something close to a “shirt of fire” for opposition actors. The collapse of the peace process, the institutionalisation of the post-2016 security regime and the near-total takeover of mainstream media mean that any move perceived as accommodating Kurdish demands can be instantly reframed as a security threat or a betrayal of the “national survival struggle”. At the same time, Kurdish voters – having experienced both the promise and the violent unravelling of the peace process, as well as ongoing repression of their elected representatives – increasingly demand clarity rather than tactical silence from would-be partners in the Turkish opposition. This asymmetry of risk is striking: for CHP and IYI Party elites, even limited gestures towards Kurdish inclusion carry high short-term reputational and electoral costs; for Kurdish actors and constituencies, continued exclusion or half-measures signal that their rights and security remain permanently negotiable. The result is a structurally unstable equilibrium in which all sides know that some form of Kurdish–Turkish opposition alignment is necessary to unsettle the AKP–MHP bloc, yet none can fully own such a strategy without incurring serious political danger.

In the broader Middle Eastern and international context, the Kurdish issue has further narrowed the opposition’s room for manoeuvre, while the most recent “terror-free Turkey” initiative has heightened this constraint rather than relaxing it. 

In the broader Middle Eastern and international context, the Kurdish issue has further narrowed the opposition’s room for manoeuvre, while the most recent “terror-free Turkey” initiative has heightened this constraint rather than relaxing it. Western involvement with Kurdish forces in Syria and Iraq – justified in terms of counter-ISIS operations, stabilisation, and human rights protection – continues to feed the government’s master narrative that Kurdish political and territorial claims are embedded in a wider external project to weaken or partition Turkey. Against this backdrop, Ankara’s latest push to reframe domestic politics around the promise of a “Terörsüz Türkiye” does not only target the PKK; it seeks to redraw the regional and internal security architecture in ways that fuse counter-terrorism, border policy, and regime consolidation into a single strategic agenda.

In this new phase, the CHP has again struggled to position itself as a central, agenda-setting actor. It has offered selective critiques and procedural concerns, but it has not been able to articulate a clear, autonomous roadmap for how demilitarisation, rights, and national security could be reconciled within a post-conflict framework. The İYİ Party, shaped by its MHP origins and a strongly security-sensitive electorate, has remained largely outside the process, presenting itself as the guarantor of national unity rather than a stakeholder in any re-imagining of centre–periphery relations. As a result, the governing bloc effectively monopolises the design and language of the “terror-free Turkey” project, while the main opposition parties are reduced to reacting from the periphery.

This has direct implications for their credibility as potential governing forces. A process that aspires – at least at the level of rhetoric – to restructure the domestic order and Turkey’s regional posture inevitably raises foundational questions about citizenship, decentralisation, cross-border operations, and the future of armed non-state actors. By failing to shape that agenda, or by standing visibly outside it, both the CHP and the İYİ Party risk being perceived as either unwilling or unable to manage the country’s core security dilemmas. In a context where the government presents “terror-free Turkey” as the strategic key to a newly configured regional order, exclusion or self-exclusion from that process makes it harder for the opposition to convince both domestic and international audiences that they can assume executive responsibility without jeopardising stability. In short, the Kurdish question – now recoded through the language of a “terror-free” future – remains the opposition’s most critical and combustible fault line, and their distance from the current process structurally weakens their prospects of governing change.

AKP–MHP Governance Failures: Economy, Neo‑Patrimonialism and Social Policy

The structural strengths of the AKP–MHP regime coexist with growing and increasingly visible governance failures. These failures are especially pronounced in the fields of macroeconomic management, social policy, institutional integrity and gender equality. From a policy‑oriented perspective, they constitute potential sources of vulnerability for the ruling bloc and, conversely, potential reservoirs of legitimacy for an opposition capable of articulating credible alternatives.

First, by 2025, the economy has moved from being the AKP’s core source of legitimacy to its most visible strategic vulnerability.

First, by 2025, the economy has moved from being the AKP’s core source of legitimacy to its most visible strategic vulnerability. In the party’s first decade in power, it could credibly claim ownership of a success story built on post-2001 reforms, EU-anchored expectations and a favourable global environment; growth was robust, inflation manageable, and large segments of society experienced upward mobility. From the mid-2010s onwards, however, this configuration unravelled. Politically-driven “low interest rate” experiments, the hollowing-out of central bank autonomy, and chronic high inflation eroded real incomes and destroyed the sense of predictability that underpinned the AKP’s earlier social contract.

Poverty and inequality indicators remain acute; the professional middle classes feel squeezed; and young, educated cohorts are experiencing a combination of stagnant wages, housing insecurity and declining expectations, often expressed in a desire to emigrate. 

The policy turn after the 2023 elections – with the appointment of a more orthodox economic team and a shift towards fiscal and monetary tightening – has not reversed this damage so much as it has redistributed its costs (Akcay 2024). Stabilisation efforts have meant a spike in interest rates, rising tax pressures and de facto austerity for middle- and lower-income groups already exhausted by years of price instability. Poverty and inequality indicators remain acute; the professional middle classes feel squeezed; and young, educated cohorts are experiencing a combination of stagnant wages, housing insecurity and declining expectations, often expressed in a desire to emigrate. The government still deploys targeted social transfers, credit channels and public employment as instruments of political management, but these tools now operate in an environment where macroeconomic strain is visible in everyday life – rent, food, energy, education – and where the promise of shared future prosperity has lost much of its credibility.

In this 2025 setting, the economy no longer functions as an uncomplicated asset that can be traded for political loyalty. Rather, it is a field of permanent crisis management in which the regime must continuously balance the demands of international markets and creditors against the anger of a population living with devalued savings and compressed living standards. The AKP retains considerable capacity to distribute selective benefits and shield key constituencies, yet the structural malaise of high inflation, low trust in institutions and the erosion of the “success story” narrative has turned the economic sphere into a central fault line of regime stability rather than a pillar of its strength.

Secondly, the consolidation of a neo‑patrimonial system of rule has further weakened state capacity and public trust (Bektas 2025). Public procurement, urban development and large‑scale infrastructure projects have become key mechanisms for the redistribution of resources to politically-connected firms, creating a “crony capitalist” ecosystem in which economic and political power reinforce one another (Guven 2023). Regulatory agencies, oversight bodies and courts have been brought under tighter executive influence, hollowing out formal checks and balances. This has diminished transparency, fostered perceptions of pervasive corruption and undermined the meritocratic foundations of the civil service. From the perspective of citizens and investors alike, the predictability of rules has been replaced by personalised access and political discretion.

Thirdly, social policy domains such as education, health and gender equality have been deeply affected by ideological agendas and fiscal constraints. In education, rapid expansion in the number of universities and schools has not been matched by quality improvements. Curriculum changes and institutional appointments have reflected conservative‑religious priorities, contributing to polarisation over the role of religion in public life and perceived declines in academic freedom. In the field of women’s rights, Turkey’s withdrawal from the Istanbul Convention and rising concerns about gender‑based violence have been accompanied by discourses that re‑emphasise traditional family roles and question international gender equality norms. These trends disproportionately affect women, youth and urban middle‑class professionals – constituencies that might be inclined to support opposition parties, but whose grievances are not always channelled into coherent political projects.

From the vantage point of the opposition, these weaknesses of the incumbent regime ought to represent significant opportunities. Objective indicators and everyday experiences alike point to a declining quality of governance, shrinking economic prospects and growing social stratification. Yet the translation of these problems into sustained opposition support has been uneven and fragile. High levels of affective polarisation, partisan media consumption and clientelist ties limit the extent to which dissatisfaction with performance translates into willingness to vote for alternatives. Moreover, as the next section explores, the opposition’s own organisational and programmatic deficits have often prevented it from capitalising fully on the ruling bloc’s vulnerabilities.

Opposition Weaknesses: Leadership, Organisational Capacity and Programmatic Ambiguity

The main opposition parties, the CHP and the IYI Party, face a hostile structural environment but also suffer from significant self‑inflicted weaknesses. Three dimensions stand out: leadership and cadre formation; programmatic clarity and policy articulation; and internal cohesion.

In terms of leadership and cadre formation, the opposition has consistently struggled to produce figures who can rival President Erdoğan’s incumbency advantages, personalised authority and symbolic capital.

In terms of leadership and cadre formation, the opposition has consistently struggled to produce figures who can rival President Erdoğan’s incumbency advantages, personalised authority and symbolic capital. The 2023 presidential campaign crystallised this problem: Kemal Kılıçdaroğlu briefly became the focal point of anti-government expectations, yet he was ultimately unable to project a compelling leadership image beyond the core CHP electorate (Yavuz and Ozturk 2023). The post-Kılıçdaroğlu transition has not fundamentally altered this imbalance. Although Özgür Özel represents organisational renewal and a more dialogical style, he has so far not closed the gap with Erdoğan in terms of charisma, narrative dominance or perceived capacity to ‘run the state’. Similarly, Ankara Metropolitan Mayor Mansur Yavaş, despite consistently ranking as one of the country’s most popular political figures in public opinion surveys, does not project a charismatic leadership profile and remains an unknown quantity in high-stakes national politics. His strategic intentions at the presidential level are uncertain – not least because it is unclear whether his own party would nominate him – and even in the event of a candidacy, he could face legal and institutional pressures of the sort directed at Ekrem İmamoğlu. This combination of popularity without overt ambition, charisma or institutional protection further complicates the opposition’s ability to consolidate a clear and credible leadership alternative

A similar limitation applies to the IYI Party: under its new leader Müsavat Dervişoğlu, the party retains organisational visibility and ideological coherence within nationalist and centre-right circles, yet it has not succeeded in cultivating a leadership profile capable of generating broad cross-class, cross-regional or cross-cleavage appeal. Dervişoğlu’s political persona remains largely confined to the party’s traditional nationalist base, lacking the symbolic capital, narrative versatility and policy breadth required to mobilise constituencies beyond this core. As a result, the IYI Party continues to operate primarily as a niche actor within the opposition ecosystem – important for coalition arithmetic and nationalist signalling, but structurally limited in its ability to project itself as a plausible pillar of a nationwide governing alternative.

While episodic hopes have coalesced around particular personalities – most notably Ekrem İmamoğlu after the 2019 and 2024 municipal victories – these moments have repeatedly been blunted by legal pressures, intra-party competition and strategic hesitations over presidential candidacies and coalition design (Ozpek, Ozturk, Dagi and Erkoc 2025). The imprisonment, political banning or judicial harassment of key figures further narrows the pool of credible national contenders. At the same time, neither the CHP nor the IYI Party has managed to systematically recruit, train and promote a new generation of technocratic and political cadres capable of governing complex state institutions in the event of a transition. Much of the upper and middle-level leadership still reflects the sociological profile and worldview of earlier secular-republican or traditional nationalist elites. This continuity limits the opposition’s capacity to speak convincingly to conservative, religious or peripheral constituencies that are indispensable for constructing a durable majority, even as it tries to reposition itself through discourses of “normalisation” and institutional repair.

Programmatically, the opposition has repeatedly failed to project a clear and credible alternative on core policy domains, particularly the economy, foreign policy and the Kurdish question.

Programmatically, the opposition has repeatedly failed to project a clear and credible alternative on core policy domains, particularly the economy, foreign policy and the Kurdish question. Opinion surveys and qualitative studies suggest that many citizens are aware of existing problems – rising costs of living, declining quality of education, politicisation of the judiciary – but remain unconvinced that opposition parties possess either a coherent plan or the competence to address them effectively. Opposition economic platforms often oscillate between orthodox, market-friendly rhetoric and diffuse promises of social justice, without specifying institutional mechanisms, distributional trade-offs or coalition-building strategies that would make such programmes governable. The CHP’s late-November 2025 programme revision, its first in thirteen years, illustrates this tension. The leadership presented the new economic vision as resting on four pillars – “effective and productive public administration, a fair macroeconomic stability framework, transformation in employment and production, and strategic sectoral structuring” – yet these categories remain largely generic, technocratic and weakly embedded in a broader political economy narrative that speaks to contemporary crises of precarity, climate transition and digital transformation. In foreign and security policy, the CHP and IYI Party continue to criticise the government’s personalised, militarised and transactional diplomacy, but they have struggled to articulate a positive, multi-polar vision of Turkey’s international role that goes beyond delayed calls for a “return to the West” or abstract references to “balance” between great powers. The new CHP programme’s emphasis on external “resilience” and security does little to resolve this, offering neither a detailed roadmap for relations with the EU and NATO nor a clear framework for handling regional conflicts and migration pressures. Finally, the way in which such programmes are drafted and communicated – often through elite-driven commissions and episodic party conferences rather than sustained, participatory debate with party organisations and societal actors – further limits their persuasive power. The ruling bloc can thus continue to frame the opposition not only as divided and inexperienced, but also as programmatically anachronistic: formally updated on paper, yet substantively out of sync with the demands of the current conjuncture.

Internal cohesion presents a further challenge. Both the CHP and the IYI Party have been plagued by factional struggles, leadership contests and ideological disputes. In the CHP’s case, the tension between traditional Kemalist‑statist currents and more reformist or social‑democratic segments has generated recurrent crises over candidate selection, alliance strategies and the balance between identity and class‑based appeals. IYI Party, for its part, has faced difficulties in balancing its nationalist roots with the need to appeal beyond its core base, leading to cycles of fragmentation, resignations and public infighting. These internal conflicts not only consume organisational energy; they also send out negative signals to voters about the opposition’s capacity to govern coherently. Elite‑level divisions are amplified by social media dynamics, where intra‑opposition criticism often becomes more visible than constructive programmatic work.

Finally, certain strategic choices – such as an overemphasis on “softening” (yumuşama), or premature personalisation of presidential candidacies – have inadvertently strengthened the incumbents. Efforts to normalise relations with the government without clear institutional guarantees risk demobilising opposition supporters and legitimising the existing order without extracting concessions. Similarly, the early elevation of figures as inevitable presidential candidates has allowed the ruling bloc to target them through legal, media and institutional means, narrowing the opposition’s room for manoeuvre. In combination, these factors contribute to a perception that, while the opposition can occasionally win important local victories, it lacks the depth, discipline and strategic clarity required to engineer a systemic change in national politics.

Conclusion: Prospects for Change under Hegemonic Authoritarianism

The analysis presented in this policy paper suggests that the prospects for a medium‑term change in power in Turkey remain uncertain and, under current conditions, structurally constrained. The AKP–MHP coalition has succeeded in constructing a hegemonic authoritarian order grounded in bureaucratic control, nationalist‑conservative social alliances and advantageous external conditions. This order has proven resilient even in the face of serious economic downturns and governance failures. While these failures create potential vulnerabilities for the ruling bloc, they do not automatically translate into opposition gains.

For the opposition, the challenge is twofold. On the one hand, it must navigate a political arena in which the rules of the game are tilted against it: media concentration, legal repression, bureaucratic partisanship and securitisation of dissent create formidable barriers to effective contestation. On the other hand, it must confront its own internal weaknesses: limited cadre development, unclear policy platforms, leadership deficits and persistent intra‑party conflicts. 

For the opposition, the challenge is twofold. On the one hand, it must navigate a political arena in which the rules of the game are tilted against it: media concentration, legal repression, bureaucratic partisanship and securitisation of dissent create formidable barriers to effective contestation. On the other hand, it must confront its own internal weaknesses: limited cadre development, unclear policy platforms, leadership deficits and persistent intra‑party conflicts. Without significant progress on both fronts, public dissatisfaction with the status quo is likely to remain fragmented and politically underutilised.

From a policy perspective, three implications follow. First, international actors – including the EU and its member states – should recognise both the structural nature of hegemonic authoritarianism in Turkey and the fragility of opposition forces operating within it. Rather than episodic moral condemnation or purely transactional engagement, external policy should seek to support pluralism, rule‑of‑law safeguards and societal resilience in ways that do not simply reinforce government narratives of foreign intervention. Secondly, opposition parties need to invest seriously in organisational renewal: recruiting and training new cadres, formulating detailed and credible policy proposals, and building durable channels of communication with societal groups beyond their traditional bases. Finally, any realistic strategy for democratisation will have to confront, rather than indefinitely defer, the Kurdish question and broader issues of inclusive citizenship. Without a principled and politically imaginative approach to these questions, attempts to build broad opposition coalitions will remain vulnerable to securitising narratives and divide‑and‑rule tactics.

All in all, unless there is a significant shift either in the balance of power within the state apparatus or in the strategic behaviour of opposition parties, a change of government in Turkey in the medium term will remain difficult to effect. The current constellation is one in which an incumbent hegemonic bloc, despite its growing performance deficits, continues to enjoy structural advantages that the opposition has not yet found a way to neutralise. Understanding and addressing this asymmetry is crucial for any effort – domestic or international – aiming to support democratic resilience and the possibility of political alternation in Turkey’s second century.

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Panagiota Manoli and George Tzogopoulos, Senior Research Fellows at ELIAMEP, provide a first assessment of the ongoing peace talks concerning the war in Ukraine. (in Greek)

• Polarization as an impact of crises and its connection to radicalization leading to violent extremism through the study of two crises: a) the migration/refugee crisis of 2015-2016 and b) the pandemic.
• An important part of the problem is the political mainstreaming of extremist narratives, that is, the choice of politicians to increasingly exploit far-right and conspiratorial narratives that have been supported by segments of the population in recent years.
• Polarization is an issue that concerns groups of individuals and not lone actors
• the risk of conflict is magnified when society is divided into two equal groups with competing goals”
• Multiple crises are more dangerous, as on the one hand they exert greater pressure on the management mechanisms of states and on the other hand they expand the vulnerability of societies, groups and individuals.
• A broad sense of democratic deficit and two successive processes of questioning have been created that lead to a crisis: a) of trust and b) of representation.
• Prolonged polarization has led to the radicalization of a large number of citizens, without necessarily resulting from the support of a specific ideology
• Disinformation, the spread of fake news and the dissemination of conspiracy theories constitute a threat to democracy and have caused significant problems in electoral processes and fuel polarization.
• The pandemic acted as a catalyst and influenced radicalization, but also the way extremist groups operate.

Read here in pdf the Policy paper by Triantafyllos Karatrantos, ELIAMEP Research Associate (in Greek).

George Dikaios, Senior Research Fellow, ELIAMEP

The Conference of the Parties to the United Nations Framework Convention on Climate Change has concluded without impressive results. What seems to be confirmed is that the international community understands the need to combat climate change, as an agreement was reached at the last minute. However, neither the required progress (on what was already agreed upon since 2015) was observed, nor the political will to breathe new life into the implementation of existing policies (which would lead to achieving the goal of maintaining the Earth’s average temperature at 1.5 degrees Celsius). The current political situation is challenging, and the results of COP30 were easy to agree on: a promise to increase funding for adaptation to climate change, the creation of a just transition mechanism, and the recognition of indigenous rights. Once again, there was no agreement on the process of transitioning to climate neutrality (and thus reducing the use of fossil fuels), nor on other critical issues, such as deforestation (which was expected as COP30 took place in Brazil). Even worse, there seems to have been an informal agreement to leave the burden of active climate action to “coalitions of the willing” operating outside the United Nations framework, as the latter seems to be a victim of the current trend of drifting away from multilateral cooperation.

Emmanuella Doussis, Professor, National and Kapodistrian University of Athens; Head of the Climate and Sustainability Programme and Senior Policy Advisor, ELIAMEP

Every year, as the annual COP meeting on Climate Change is drawing to a close, a major debate starts up on how effectively the system of international cooperation is tackling climate change. This is because greenhouse gas emissions are still rising, despite the promises and ambitious plans to switch to clean energy and reduce these harmful emissions. At the same time, the current geopolitical stand-offs continue to pose unprecedented challenges for multilateral cooperation.  This year’s conference in Belém, on the Amazon, concluded without major decisions being made on the implementation of the Paris Agreement and, in particular, on a phase-out roadmap for fossil fuels. Instead, the main outcomes of COP30 were a voluntary fossil fuel reduction plan, a new target to triple climate change adaptation financing, and a mechanism for a just transition.  It is clear that the annual global climate conference cannot provide both meaningful and all the solutions to climate change, especially given the absence of a willingness to self-limit on the part of the major polluters. Substantial agreements are not possible (or even realistic) when there are 200 countries around the negotiating table, each at their own level of development and with their own priorities, interests and levels of harmful emissions. But COP can serve as a guide to what the international community is collectively willing to do to prevent further global warming, and indicate what needs to be done to achieve this goal.

Othon Kaminiaris, Research Fellow, ELIAMEP

COP30 concluded after two weeks of difficult negotiations, resulting in the adoption of 29 decisions, the “Belém Package.” This package includes several substantive steps toward implementation: the establishment of a just transition mechanism, the commitment to triple adaptation finance by 2035, and the completion of 59 voluntary indicators to track progress under the Global Goal on Adaptation. In addition, and though outside the formal decisions, the conference advanced, under Brazil’s initiative, the FINI (Fostering Investible National Implementation) mechanism for financing mature adaptation projects, as well as the Tropical Forests Forever Facility, which mobilized USD 6.7 billion for the protection of tropical forests.

However, the central political deadlock remained: no reference to phasing out fossil fuels was included in the official decisions, despite pressure from at least 80 countries. Thus, while adaptation, finance, and just transition were strengthened, no path was agreed on for decreasing global emissions in the coming years. As a counterweight, Colombia and the Netherlands announced that they will co-host, outside the UNFCCC framework, the First International Conference on the Just Transition Away from Fossil Fuels in April 2026, an initiative that may give an impetus to the COP process itself.

Looking ahead to COP31 in Turkey at the end of 2026, two issues, thus, remain unresolved:
a new collective climate finance goal (NCQG) that also covers mitigation, and the need for a shared approach to emission reductions in a decade requiring rapid and decisive acceleration.

Cheryl Novak, Research Associate, ELIAMEP

COP30 fell short of its central mandate, which is to accelerate collective action to keep global warming to 1.5°C and to establish a credible pathway for the phase-out of fossil fuels. The summit made progress on areas such as adaptation finance, Indigenous-led protection, and nature-based solutions, including the announcement of prominent initiatives like the Tropical Forests Forever Facility. Yet COP30 ultimately underscored the challenges of consensus-based multilateralism in a global environment characterized by divergent interests. UN Climate Chief Simon Stiell underscored COP30’s issues in his closing remarks, stating, “denial, division and geopolitics has dealt international cooperation some heavy blows this year.”

In response to the lack of progress on COP30’s core mission, its President, André Corrêa do Lago, announced plans to develop two “roadmaps” outside the formal negotiating process: one to halt and reverse deforestation, and another to support a just and orderly transition away from fossil fuels. Whether these parallel tracks can help unlock progress at COP31, or signal the beginning of a deeper schism between fossil-fuel-dependent states and more ambitious parties remains uncertain. Frustration over COPs opaque decision-making process and state accountability remains, as consensus rules mean countries’ positions on key provisions are undisclosed. Moreover, as in previous conferences, observers highlighted the significant presence of fossil-fuel-aligned interest groups seeking to shape outcomes. Participation by Indigenous, youth, and feminist organizations reached record levels, yet Indigenous representatives argued that their involvement remains largely symbolic and some staged blockades calling for stronger protections.

For countries in the Mediterranean, these shortcomings have direct implications. Under current policies, global warming projects now stand at 2.5–3.5°C, and Med region is warming 20% faster than the global average. This heightens existing pressures on water systems, agriculture, and food security. In this context, global agreements matter, but local action will be decisive for the future of the people of the region. Greece and its neighbors will need to accelerate renewable energy deployment, strengthen water and food systems resilience, and integrate climate risk across all planning processes. Regardless of multilateral setbacks, prioritizing climate security and system resilience should remain central to Greece’s national strategy.

 

Alexandra Brzozowski, EU affairs journalist, outlines how Ukraine enters a dangerously uncertain winter as Russian offensives intensify, energy infrastructure comes under sustained attack, Western support shifts, while unofficial diplomatic initiatives stir controversy.

Read the ELIAMEP Explainer here.

Startups do not operate in a void and institutions in their direct environment impact them. This working paper is a first in depth field research of a single accelerator in Greece, a country that is relatively lacking in international rankings for innovation and competitiveness. We chose to focus on MIT Enterprise Forum Greece (MITEF Greece, 2015-2022), the only accelerator in the country to be linked to an international university. We used a mixed qualitative and descriptive statistics methodology. Our main findings are that its accelerated startups and their founders stood out in the startup ecosystem in the following ways: founders were a mosaic of local and Diaspora Greeks as well as non-Greeks, startups had a global reach, with a presence in 20 countries and an impressive share in deep tech processes and sectors, thus enhancing substantially the geoeconomic reach of the Greek startup community. Indicatively among the top sectors medicine- life sciences, environment-energy, and technical solutions-robotics stood out from the beginning although this sectoral composition was not usual among startups in the Greek ecosystem especially before 2019. In a nutshell, MITEF Greece accelerated startuppers stood at the cutting edge of the nexus of innovation and internationalization in the Greek startup ecosystem.

How was this made possible? We put forward the hypothesis that this outcome was attained as a result of the following multiple factors: the dedication; high expertise; open mindset; heritage of a culture of trust, reciprocity and strong sense of community (“μαζί”) of the Greek MIT graduates (local, brain drain and Diaspora), who were running MITEF Greece; the careful selection process of startups accepted in acceleration programs; the ample business and technological know-how resources available to MITEF Greece by the vast global MIT entrepreneurship community and its enthusiastic pool of Diaspora Greeks in the USA who were involved in the accelerator and its offspring The Hellenic Innovation Network.

Although the case of MITEF Greece cannot be exactly replicated, we believe that it offers useful insights for minimizing the disintegration and lack of communication between support organizations and policies for the startup ecosystem. It is an extraordinary example of actively enhancing internationalization of innovation through commercialization of research results, an important GIFT for Greece at a time of rising deglobalization and global economic fragmentation. This is the ultimate lesson derived from this case study.

Read here in pdf the study by Ioanna Sapfo Pepelasis, Professor Emerita, Athens University of Economics and Business (AUEB);
Senior Research Fellow at ELIAMEP; Jenny Vidali, MA, College of Europe; Athanasios Kolokythas, PhD student, Toulouse School of Economics (TSE). Research assistance was provided by: Tigran Ghalümyan,Grant Thornton and George Themelis, Senior year undergraduate student, Athens University of Economics and Business (AUEB).

Click here to view a visual representation of the main findings, presented through tables and infographics.

In this issue of MORE, the focus is on Greek–Albanian relations between March and October 2024, shaped by the Fredi Beleris case—a local legal dispute that evolved into a major diplomatic and media controversy. Beleris, mayor-elect of Himara, was convicted for electoral corruption but later elected to the European Parliament for Greece’s New Democracy party, intensifying tensions over democracy, minority rights, and judicial independence.

In Albania, pro-government media framed his conviction as proof of judicial reform, while opposition outlets denounced it as political persecution. In Greece, coverage was overwhelmingly sympathetic, portraying Beleris as a political prisoner. Widespread misinformation—including fake stories and manipulated images—deepened mistrust and polarization.

Tensions peaked during Beleris’s October 2024 visit to Tirana as an MEP, marked by protests and symbolic confrontation. Yet, by late 2024, relations began to improve, aided by Albania’s post-election pro-EU stance and significant progress in EU accession, with five of six negotiation clusters opened.

Covering the period from March to October 2024, MORE 6 shows how one legal case exposed the fragility of regional trust, but also how diplomatic pragmatism and the shared goal of European integration can turn confrontation into cooperation.

The Media Observatory Reports are part of the broader “ALGREE – Albania–Greece: Understanding. Connecting. Partnering” project, implemented by the South-East Europe Programme of the Hellenic Foundation for Foreign & European Policy (ELIAMEP) with support from the Open Society Foundations – Western Balkans and the Friedrich Naumann Foundation for Freedom Greece and Cyprus. Based on systematic monitoring of leading Albanian and Greek media, the reports examine how each country portrays the other and how media narratives shape mutual perceptions and shared regional agendas.

Michalis Mathioulakis, Energy Strategy Analyst, Academic Director of the Greek Energy Forum and ELIAMEP Research Associate , explains how the 6th Ministerial Meeting of the Partnership for Transatlantic Energy Cooperation (P-TEC), held in Athens in November 2025, highlighted the emergence of a new transatlantic energy architecture with Greece at its center, serving as the key Mediterranean entry point for U.S. gas flows to Southeast Europe and Ukraine.

Read the ELIAMEP Explainer here.