ELIAMEP

Dimitris Kollias, Research Fellow at ELIAMEP, argues that Artemis II signals the consolidation of a new space age in which the Moon is becoming a strategic, economic, and geopolitical frontier shaped by rival US- and China-led blocs, expanding commercial power, and growing competition over resources, rules, and orbital infrastructure. He contends that Europe remains relevant but structurally constrained by fragmentation and slow institutional adaptation, even as space is increasingly tied to security, competitiveness, and digital sovereignty. For Greece, he argues, this shift creates an opportunity to build selective strategic relevance through Earth observation, secure communications, maritime awareness, civil protection, and the integration of satellite infrastructure with sovereign AI and data-processing capacity.

Read the ELIAMEP Explainer here.

Rapid advancements in the field of Artificial Intelligence (AI) are expected to deliver significant economic and productivity benefits. The EU, which risks returning to a low-growth path, would benefit from the development and adoption of AI systems. However, in almost all key metrics, the EU lags far behind the US and China in AI. To reverse this trend, Europeans must tackle the structural causes that have held back AI companies, including Single Market barriers and the lack of VC funding. Europeans should also focus their efforts on open-source AI leadership to boost business adoption. Greece would also benefit significantly from these EU-wide reforms. But at the same time, Greece will need to pursue its own vertical niche in AI in order to become an AI exporter.

• The capabilities of AI systems have improved significantly in the last decade. Today’s AI systems can process different types of information, such as text, video, audio, code, and solve complex reasoning challenges. 

• Due to these technical advances, AI systems can help businesses automate tasks, enhance human workers and deliver new services. This AI transformation could deliver a 7-15% increase in global GDP, in the next decade. 

• However, as the European Union (EU) lags behind the development and adoption of AI systems, it may lose out on the economic and strategic benefits that the technology provides. 

• The EU’s AI lag could be attributed to structural barriers that have prevented the creation and scaling of AI solutions. These include the barriers of the Digital Single Market, the lack of access to high-quality funding and the inability to translate Europe’s scientific excellence into concrete market outcomes. 

• The EU’s current approach to AI, which includes initiatives such as the AI Act and the AI Continent Action Plan, must be updated accordingly to address these structural challenges and provide effective incentives for the emergence of European AI frontrunners. 

• As part of the EU, Greece would benefit significantly from such reforms. At the same time, Greece’s limited resources mean that the country’s position in this field can only be improved by pursuing advantages in vertical AI domains, such as agriculture and climate resilience.

Read here in pdf the Policy paper by Giorgos Verdi, Policy Fellow at European Council on Foreign Relations (ECFR).

Technical advances in AI

The capabilities of AI systems have been progressing rapidly over the last decade. In 2017, AI exceeded human performance in both image and speech recognition. By 2022, the release of the AI system ChatGPT had captured the world’s attention with its ability to perform language-based tasks. The virality of ChatGPT’s release also showcased to the wider public that AI systems had achieved the capacity to perform some economically-valuable tasks.

Since then, AI development has been marked by further qualitative leaps. Today, cutting-edge AI systems are multimodal: they can process text, audio, images, video and computer code. They also showcase notable improvements in their ability to solve complex reasoning challenges by breaking down multi-step problems into intermediate steps. Leveraging these algorithmic innovations, AI systems achieved gold-medal performance in the International Mathematics Olympiad in 2025 and have surpassed PhD-level human experts in science tests.

Besides algorithmic innovations, improvements in AI capabilities have also been made due to the growth in computational resources and available training data. This correlation between more compute, data, parameters and model performance has been described by researchers as ‘scaling laws’. Under the current paradigm, developers are in need of more powerful computer resources and new data sets in order to train ever larger models and achieve new breakthroughs.

Despite these trends, AI development is still faced with certain limitations. AI systems often generate misleading outputs and fabricated data. The spatial capabilities of AI – the prerequisite for the execution of physical tasks – remain far from human level. AI systems also perform poorly in long-horizon planning and execution. This paradox has led researchers to characterise the status of the AI frontier as uneven or ‘jagged’. AI excels in domains where machine-readable data is available but underperforms in tasks that are unstructured or ambiguous.

Economic implications of AI

Technical advancements in AI systems can have a significant economic impact, both in the world and in Europe. AI can provide economic benefits by helping businesses to automate tasks, enhance human workers’ capabilities, and roll out new services. As a result, AI’s economic impact is expected to span multiple domains and industries. The OECD predicts that AI can be used in most industrial activities, from optimising machine systems to improving industrial research and development (R&D). AI could also boost automation in manufacturing, ensure timely and cost-effective maintenance, and guaranteeing stronger quality of products and processes. In healthcare, AI is already helping doctors to scan medical images in order to deliver faster and more accurate diagnosis. AI is also revolutionising drug discovery by extracting novel insights from complex biomedical data. In automotive, AI is used in driverless cars to recognise traffic signs and pedestrians.

AI-driven transformation across industries is then expected to drive economic growth. However, the magnitude of such growth has been contested. On one hand, Goldman Sachs predicts that AI could drive a 7% increase in global GDP (or almost $7 trillion) and lift productivity growth in the United States by 1.5% annually in the next decade. In a similar line, the McKinsey Global Institute predicts AI to increase global GDP by 1.2% annually and deliver an economic output of $13 trillion in the next five years. PwC’s estimates are even higher, with an expected increase to global GDP by 8-15%, in the next 10 years.

Other reports predict that AI will have a more modest macroeconomic impact. MIT Professor Daron Acemoglu estimates that AI will not lift global GDP more than 1-2% over the next decade with less than 0.1% annual gain in productivity. However, it must be noted that Acemoglu’s estimates rest on the assumption that only 5% of tasks can be performed more cheaply by AI systems than human workers. In turn, this estimate was based on a 2023 study when AI systems were much less capable. Finally, other approaches have tried to reconcile these differences and consider a scenario where AI systems raise US productivity by 0.5%. Under this assumption, real GDP per-capita could nearly be $7000 higher by 2035.

The uncertain impact of AI on economic growth can also be attributed to the ‘productivity paradox’ ingrained to technological transformations. For example, the productivity gains of electricity took 40 years to fully materialise after the first generating station was built by Thomas Edison. Similarly, information and communication technologies didn’t lead to expected productivity gains in the 1970s and 1980s. As Robert Solow described this productivity paradox in 1987: “You can see the computer age everywhere but in the productivity statistics”.

In order to explain why the productivity paradox occurs, researchers have argued that transformative technologies follow a ‘J-curve’ trajectory. The extensive investments which are required to integrate transformative technologies into organisations are often underestimated. Historically, there have been periods of considerable length in which unmeasured inputs are being built in order to complement the new transformative technology. For example, AI systems that are used to boost productivity also require investments in staff training, workflow redesign, data and compute infrastructure. These bottlenecks are likely to cause an initial dip in productivity – the downward slope of the J-curve. However, once these adjustments are made, firms tend to experience a productivity upswing.

If then, AI systems are to drive economic growth – albeit within a longer timeline – it could present a significant economic opportunity for the European Union (EU).

If then, AI systems are to drive economic growth – albeit within a longer timeline – it could present a significant economic opportunity for the European Union (EU). Since 2000, productivity in the Eurozone has been on average 0,5% lower each year than the United States (US). This is mainly due to productivity growth in the information and communication sector and in professional services being weaker in the EU. As these two sectors make strong use of technological innovations, this shows that the EU has been less able to make use of digital technologies. If this trend persists, the consequences could be dire for the EU’s prosperity. However, the development and adoption of AI systems in the EU could help reignite productivity growth.

Besides productivity, AI could also contribute to address several of the EU’s challenges. The EU is faced with a demographic challenge, as the populations of several EU Member States peaked prior to 2025 and have now started to fall. The European population is also ageing, creating generational imbalances. This trend will generate fiscal challenges, through pressures on pension spending and the effects on the tax base. AI systems, and their potential productivity benefits, can help offset some of the pressures that demographic trends will impose on the EU’s economy.

In addition, the EU has launched an agenda of military rearmament in the face of Russia’s increased aggression and the gradual retreat of the US from European security. To achieve this, the EU adopted ReArm Europe which aims to mobilise €800 billion of defence expenditures. AI systems can play a role in this endeavour as their integration within military forces promises to provide cost-effective solutions. A report by RAND, the American think-tank, estimates that AI solutions can save US Air Forces $25 million per month – only on the maintenance of A-10C aircrafts. Similarly, the integration of AI into French Ceasar artillery pieces could provide a 30% savings in ammunition. Overall, the military applications of AI systems are likely to extend the economic benefits of the technology beyond the civilian realm. As a result, AI systems can also offset some of the fiscal pressures that increased military spending presents to European governments.

All in all, the technical advances in AI systems promise to transform industries and provide productivity benefits. Even if the optimistic projections of experts are not realised, the EU would benefit significantly from the development and adoption of AI systems. The solutions to the EU’s major challenges – from its growth and demographic problems to rearmament – should take into consideration the novel and advanced capabilities of AI systems.

The EU’s challenges in AI

Despite the potential benefits of AI systems, the EU is faced with a series of challenges in their development and adoption. As a result, the EU and its Member States may end up missing on the advantages that the technology could provide.

…the EU lags behind both the United States and China in most metrics of AI development and innovation.

Firstly, the EU lags behind both the United States and China in most metrics of AI development and innovation. According to Stanford’s AI Index, the US developed 40 cutting-edge AI models in 2024. In the same year, China developed 15 while the EU developed 3 – all of them by the French company Mistral. In the same year, US AI companies attracted $109 billion in private investments, while EU AI companies attracted $14.9 billion. The EU also lags behind the US in terms of AI entrepreneurship: 1143 AI companies were newly funded in the US in 2024, compared to 335 in the EU.

China has also surpassed the EU in terms of scientific publications in AI with 23,695 related publications in 2024, compared to 10,055 papers published by EU scientists. In addition, China accounts for 69.7% of the world’s AI patents while the country also dominates in AI robotics, surpassing the rest of the world combined in installations. According to an MIT study, Chinese has also overtaken both American and European open-source AI models, in terms of worldwide popularity.

As a result of their distinctive advantages, the US and China are home to multiple companies that develop frontier AI models. The US boasts the presence of companies such as OpenAI, Google, Anthropic, xAI and Meta. Meanwhile, Chinese start-ups DeepSeek and Moonshot have released models that are on par with those of OpenAI, while companies Tencent and Alibaba have acquired world class capabilities.

…only one European company currently competes at the frontier of AI development: the French start-up Mistral.

As a result of the EU’s gaps, only one European company currently competes at the frontier of AI development: the French start-up Mistral. However, Mistral’s models have not yet matched or surpassed the performance of their American and Chinese counterparts. In addition, Mistral’s limited funding has put the survival of the company in question. While OpenAI’s market valuation reached $500 billion in October 2025, Mistral has reached a market valuation of $14 billion. As a result, there have been reports that US company Apple has explored the acquisition of Mistral. If such a deal was to be realised, then the EU would be left with no homegrown AI developers at the frontier.

Besides AI models themselves, the EU lacks capacity in various parts of the AI value chain. AI chips that are used to train AI models are designed by US companies Nvidia and AMD and manufactured in Taiwan by TSMC. AI data centres are also increasingly concentrated in the US which hosts 75% of the world’s AI supercomputers, according to some sources. The EU, on the other hand, hosts 2-5% of the world’s AI supercomputers.

Finally, the EU has fallen short of its objectives when it comes to AI adoption. Even when the EU imports AI models and capabilities from elsewhere, businesses seem reluctant to take advantage of its productivity benefits. According to the EU’s Digital Decade report, 18% of European small and medium-sized enterprises (SMEs) have taken up AI until 2025. However, the EU’s objective is for 75% of SMEs to take up AI until 2030. It is highly unlikely that the EU will reach its target. In the US, different sources have estimated SME AI adoption to be between 20% and 40%, due to methodological differences.

Slow adoption of AI means that the productivity dividends over the next few years could be lost.

These challenges in the development and adoption of AI will hinder the ability of the EU to take advantage of the economic benefits of AI. Slow adoption of AI means that the productivity dividends over the next few years could be lost. Lack of AI development capabilities also means that Europeans will have little control over the direction of the technology. In 2025, the Biden administration decided to limit the export of American AI chips to 18 EU Member States, including Greece. Practically, these restrictions would have meant that the majority of EU countries would be unable to acquire AI data centres. Although the Trump administration revoked President Biden’s decision, this incident showcased how a lack of indigenous AI development capabilities can leave European vulnerable to external shocks.

Lastly, the above metrics point towards a growing gap between the US and China on one hand, and the EU on the other. This means that the relative economic and military strength of Europe is likely to be diminished as the two superpowers take advantage of AI. Moreover, other middle powers, such as Saudi Arabia and the United Arab Emirates have made significant efforts to become more competitive in the technology and direct vast amounts of capital into AI capabilities. This trend is likely to put more pressure to the EU who finds itself competing with an ever growing amount of actors in the domain of AI.

The causes of EU’s AI lag

Even if the EU falls behind China in terms of AI publications, the bloc remains a world-leading centre for AI research, talent and universities. As a result, the EU’s AI lag is caused by its inability to translate scientific excellence into concrete market outcomes. In order to improve the EU’s position in AI, the structural reasons that have led to this situation must be understood.

One of the most common points of criticism against the EU’s digital policy has been its focus on imposing strict regulations and governance frameworks on innovators. In the 2019-2024 mandate, the European Commission adopted 93 pieces of legislation that were of relevance to technology innovators. According to Mario Draghi, these Regulations and Directives have been restrictive and inconsistent, and in turn, have hindered innovative companies in Europe at every stage of their growth.

Some experts have tried explaining the EU’s AI lag based on this argument. In 2024, the EU adopted the Artificial Intelligence Act, the world’s first law to regulate AI systems. The regulation seeks to protect consumers and citizens from the harms that high-risk AI systems impose. However, it could also impose high costs of compliance and may have driven AI innovators away from building models in the EU. According to some estimations, the costs of complying with the AI Act’s legal obligations for so-called ‘high-risk’ AI systems may reach the range of €193,000 and €330,000. Besides the AI Act, innovators are also faced with legal uncertainty stemming from other regulations.

…effective regulation can provide benefits for European AI businesses.

However, the EU’s regulatory approach to AI can also bring benefits to businesses and consumers. Firstly, adherence to strict legal standards can help boost consumer trust in AI. But if left unchecked, the risks that stem from the technology can deter its adoption. Thus, effective regulation can provide benefits for European AI businesses. Secondly, the EU’s initiative to legislate on AI harmonised rules across Member States and prevented the risk of regulatory fragmentation. Thus, the alternative to the EU’s AI Act would have likely been the creation of 27 different regulatory regimes, which would have imposed a higher burden on businesses.

In addition, the EU’s innovation lag cannot be attributed to regulation alone. Before 2016, the EU’s Single Market was not heavily regulated and was only governed by two pieces of legislation: the 2000 e-Commerce Directive and the 1995 Data Protection Directive. Despite the lack of digital regulations, the EU still failed to produce successful technology companies in that period. Most of the EU regulations commentators have criticised, such as the AI Act and the Digital Services Act (DSA) were adopted in the early 2020s. As a result, other structural causes should be examined to understand the EU’s inability to nurture frontrunners in AI and in digital technologies more broadly.

Columbia Professor Anu Bradford has argued that alternative factors, other than regulation, have held the EU’s digital and AI economy back. One of the most major impediments has been the lack of a European Digital Single Market. While some steps have been taken towards further integration, the European market remains fragmented for AI companies that require scale in order to grow. Companies are required to navigate 27 different legal regimes for businesses, including differences in labour laws and tax systems. According to the IMF, Europe’s internal barriers are equivalent to a tariff of 110% for services. That puts European start-ups in a disadvantage compared to their US and Chinese counterparts that begin their growth journeys in largely homogenous markets.

Another significant impediment has been Europe’s shallow and fragmented capital markets.

Another significant impediment has been Europe’s shallow and fragmented capital markets. Innovative companies in the US have benefited largely from the existence of a vibrant Venture Capital (VC) ecosystem, in which firms are more willing to invest in high-risk, high-reward technology start-ups. Whereas the US represents 52% of the world’s venture capital market, the EU only represents 5%. European companies also struggle to attract American VC investments, as geographical proximity plays a role in firms’ decisions, according to empirical data. As a result, European innovative companies have to rely on risk-averse banks in order to finance their operations.

Taken together, these alternatives variables provide a more comprehensive explanation of the EU’s AI lag. While the costs of complying to the EU’s digital regulation can be excessive, these laws also provide trust for consumers and certainty for businesses. At the same time, the EU’s internal fragmentation and the lack of VC funding are more likely to be responsible for the lack of European AI capabilities. Any effort to reverse Europe’s AI gaps must start by addressing these structural challenges.

The EU’s AI strategy and the way forward

Europe’s AI lag has prompted officials in Brussels to expand the EU’s AI strategy beyond product regulations and adopt new sets of measures to spur innovation. In April 2025, the European Commission adopted the AI Continent Action Plan to accelerate efforts across five domains: compute infrastructure, data, skills, and compliance. While the AI Continent Action Plan is a welcome step, it does not effectively address the root causes of the EU’s bottlenecks, as described above. Therefore, an additional set of policy measures will be required to improve the current approach and allow Europeans to reap the strategic and economic benefits of AI.

In the first quarter of 2026, the European Commission is expected to put forward a new proposal that will aim to tackle internal barriers for start-ups and lead to a more integrated Digital Single Market. This has been dubbed the ‘28th regime’ as it will establish a single and harmonised set of EU-wide rules that would allow innovative AI companies to scale, instead of having to deal with 27 different regimes. At the 2026 World Economic Forum, the President of the European Commission added that the proposal would allow anyone to register a company fully online and within 48 hours.

While these are steps in the right direction, it is not clear yet whether the initiative will take place via a Regulation or through a Directive. The European Parliament’s opinion to introduce a Directive is likely to lead to a fragmented transposition and kill the spirit of the policy. It is then important that the European Commission swiftly implements this idea as a Regulation.

For AI companies to scale across Europe’s 27 different markets, it is also urgent that they are able to raise private funding. The American VC ecosystem has benefited from leveraging institutional investments, such as those coming from pension funds and insurance funds. This model is challenging for the EU to replicate in the short-term as its pool of pensions is smaller. Member States could this aim to deliver attractive returns to pensioners and finance innovation by encouraging supplementary pension schemes through beneficial tax treatments or applying opt-out mechanisms.

However, Europe still benefits from a deep pool of insurance capital, which remains underexposed to VC. Member States should signal their political backing to encourage insurance funds and other institutional investors to rebalance their portfolios towards innovation. A mere 0.1% shift in asset allocation of insurers assets would channel an additional €10 billion into Europe’s VC ecosystem.

Besides market access and investments, innovators will benefit from regulatory certainty. Although the EU’s AI Act should not be held responsible for the bloc’s AI lag, it could still prevent the creation of new AI firms if its implementation is not done well. To this end, the European Commission introduced the Digital Omnibus on AI Regulation with the aim to simplify the AI Act and ease the burdens on innovators. However, this proposal has come under scrutiny from civil society organisations as it threatens to undermine critical safeguards, such as the protection of personal data. While the EU should pursue simplification, especially in compliance reporting requirements for SMEs, the removal of the AI Act’s safeguards could hurt the already declining consumer trust in AI systems.

But even if the above measures spur the creation of new AI firms, these innovators are expected to face some additional challenges. The EU’s limited compute capacity in AI, as described above, means that these companies will be forced to form a partnership with an American large company in order to access compute resource and train their models. In order to avoid these dependencies form consolidating, it then becomes urgent that the EU be able to offer its own compute resources to its aspiring frontrunners.

Here, the AI Continent Action Plan addresses this gap with the EU’s AI Gigafactories and AI Factories programme . The Gigafactories initiative specifically will receive €20 billion investments in order for each to contain 100,000 cutting-edge chips and help train large and complex AI models. However, industry representatives have expressed concerns that no more than 70 companies or consortia will be able to take advantage of such infrastructure. Therefore, it is crucial that these efforts are complemented by a concrete set of incentives for the creation of new AI start-ups and firms.

…there is room for European support to fund new breakthroughs and link the development of AI models to existing demand.

It then remains to be seen what sort of models European start-ups will build on top of this infrastructure. While the EU and its institutions should refrain from choosing champions, there is room for European support to fund new breakthroughs and link the development of AI models to existing demand.

In November 2025, France and Germany announced an upcoming Frontier AI Initiative that will be launched in Q1 2026, in collaboration with the European Commission. According to reports, it will create a nonprofit lab that will drive research which has either been overlooked or is not viable for market players to pursue. If done effectively, this work can be crucial as more and more experts have argued that the current paradigm of AI development is reaching its limits. The Frontier AI Initiative should pursue strategic bets on frontier AI, including bets on spatial and physical intelligence.

Finally, the EU should pursue better links between AI development and AI adoption in order to ensure that the technology is viable and that it yields concrete benefits for Europeans. In October 2025, the European Commission published the Apply AI Strategy which included sectoral flagship initiatives that aim to boost AI adoption across 10 industrial sectors. Moreover, the Apply AI Strategy promotes a ‘buy European’ approach for the public sector with a focus on open-source solutions. This last part is likely the most crucial component of the Strategy and should be extended to the private sector as well for the EU to fix its AI adoption gap.

The EU should set specific quotas for its AI funding instruments – whether the AI Gigafactories or investAI – to be dedicated to the development of open AI solutions.

Open-source AI systems and open weights AI systems grant users access to study how the system works and modify it for any purposes. As a result, they are highly customisable and cheaper that proprietary AI modes. An MIT study found that closed AI models cost users six times as much as open ones despite offering only moderate performance advantages. As a result, a proliferation of open AI models is likely to boost adoption within Europe’s low-resource actors, such as SMEs. In order to promote the development of European-made open AI models, and mitigate the surging popularity of Chinese open models, there is a need for concrete set of incentives that will encourage start-ups to follow this path. The EU should set specific quotas for its AI funding instruments – whether the AI Gigafactories or investAI – to be dedicated to the development of open AI solutions.

In conclusion, the way ahead for the EU’s AI strategy lies in breaking away from the false dilemma between regulation and accelerated innovation. The competitive dynamics between the US and China on AI have prompted some experts and industry representatives to push back against regulatory safeguards. More recently, the feud between the US Department of War and the AI firm Anthropic exemplified this debate, as the firm refused to drop its safety red lines over the use of its tools by the US military.

But as seen above, effective guardrails can boost trust and propel innovation forward. In contrast, an unregulated environment is likely to generate mistrust and public backlash. Five times as many Americans are concerned than are excited about AI, which has led to calls to slow down AI acceleration in the US. Even in the realm of defence, where safety red lines can be perceived as inherent weaknesses, the absence of guardrails can manifest as inefficient resource allocation, friendly fire incidents or the misidentification of targets. The EU should continue to pursue its trustworthy approach to AI development at the same time as new policies are implemented to boost innovation within that framework.

Greece’s AI challenges and prospects

As an EU Member State, Greece is facing many of the challenges mentioned above. As a smaller economy with a limited market of business and consumer customers, Greece would benefit from these broader reforms at the EU level. For example, while Greece is home to an impressive number of 188 AI start-ups, most of them are concentrated in early stages of funding. This trend aligns with the structural challenge that Europe faces in attracting late-stage investment and turning start-ups to scale-ups. As a result, Greece should promote relevant reforms at the EU-level. The upcoming Greek Presidency of the Council of the European Union in the second half of 2027 present a window of opportunity for the country to set the agenda on these points.

Besides EU-level reforms, much can be done at the national level in order for Greece to seize the opportunities of the AI revolution. It is noteworthy that at the 2023 NeurIPS – the world’s top AI conference – 11% of the top papers selected for an oral presentation had a Greek co-author. The selectiveness of NeurIPS indicates that Greece produces world-class AI researchers and developers. However, it is also the case that Greek AI talents often work and conduct research abroad. The main aim of Greece’s AI strategy should then be to become attractive to its own AI professionals and provide them with the necessary conditions that will turn Greece into an AI exporter.

The resource-intensive nature of AI development means that smaller countries can only improve their position through dominance of specific vertical AI industries. 

First of all, this would require that Greece finds and pursues its own distinct niche in AI. The resource-intensive nature of AI development means that smaller countries can only improve their position through dominance of specific vertical AI industries. To do this best, smaller countries need to use their national context to their comparative advantage. In 2024, the High Level Committee on AI published a Blueprint for Greece’s AI Transformation. While the document explores how Greece can enhance the business ecosystem, strengthen education, and support public administration, it refrains from defining and pursuing distinct advantages in niche areas of AI development within the private sector.

…as a significant agricultural producer within the EU, Greece could focus its limited resources on developing and exporting AI models in agriculture.

For example, as a significant agricultural producer within the EU, Greece could focus its limited resources on developing and exporting AI models in agriculture. This would empower Greek farmers through precision farming techniques and AI robots that can perform field work. It would also provide added value to Greek AI developers who would be able to collect high-quality data from the field and improve AI services in agriculture both in Greece and abroad. Initial support from the Greek Government and the EU may be required to help connect farmers to AI solutions and compensate for the lack of skills and trust. But as such solutions begin to scale, this market gap will likely be filled by the AI developers themselves who could become able to build AI solutions on-site and in close coordination with farmers.

Another example of a distinct niche that Greece could pursue is AI for climate resilience. AI systems can improve environmental monitoring and enhance early-warning systems for fires, heatwaves, draughts and water management. The development of Greek AI solutions that help predict such events can enhance preparedness and improve crisis relief for local communities. Moreover, Greek AI developers would be able to export their solutions to a number of public and private actors that face similar climate-related challenges, such as in Southern Europe, California or Australia.

Besides the relevance that these two AI niches hold for Greece, the country is also well-positioned to provide AI compute infrastructure to interested innovators. Greece will host one of the EU-funded AI Factories under the name ‘Pharos’ with the aim to accelerate AI innovation in health, the Greek language and culture and sustainable development. The project will be supported by a budget €30 million, over a period of 36 moths. Greek AI solutions in agriculture or in climate resilience should receive priority access to valuable computational resources through this initiative in order to encourage innovators to develop Greece’s niche.

Greece has the AI talent, and soon will acquire capabilities in AI compute infrastructure. Combined with the necessary reforms in the Digital Single Markets and in Europe’s VC ecosystem, this means that Greek AI innovators have the potential to become developers and even exporters of critical AI solutions. However, the current state of the AI competition forces smaller states to make targeted choices with their limited resources. Casting a wide net will stretch efforts thin and lead to suboptimal results. Instead, Greece should provide incentives for its talent to pursue excellence in one or two AI vertical domains.

Conclusion

AI may drive a significant economic transformation akin to the impact of the steam engine, the electric dynamo and the personal computer. But while past technological revolutions drove prosperity, they were not evenly distributed. The current characteristics of the AI landscape indicate that the European Union risks finding getting the short end of the stick. Without frontrunners that develop frontier AI systems and without businesses and workers that are able and willing to make use of AI, the economic benefits of the technology are likely to flow to the United States and China. Reversing this trend may be one of the most important challenges that Europeans face today. It will require tackling long-standing barriers and thinking creatively about the ways in which AI systems and applications can improve the lives of EU citizens. For an even smaller actor like Greece, this task seems daunting. In order to establish its presence in the AI revolution, the country will need to diagnose its strengths with honesty and hone a critical and unique niche in AI.

The policy brief by Ioannis Alexandris (Research Fellow, Wider Europe Programme – ELIAMEP & Researcher, think nea – New Narratives of EU Integration) and Dimitra Koutouzi (Defence Policy Analyst), “From Nuuk to Reykjavik: The High North’s geopolitical scramble and the consequences for the EU and its enlargement policy”, was prepared in the framework ELIAMEP’s initiative think nea – New Narratives of EU Integration, supported by the Open Society Foundations – Western Balkans.

This policy brief explores how the rapidly evolving geopolitical dynamics in the Arctic are intersecting with the European Union’s enlargement policy. Heightened strategic competition in the High North—combined with uncertainty surrounding the transatlantic security architecture—has reopened debates in Iceland about reviving its EU accession process. Against this backdrop, the brief examines how a potential Iceland track could reshape the EU’s broader enlargement agenda.

While Iceland represents a relatively “low-friction” candidate due to its deep regulatory alignment with the EU, its potential return to accession negotiations raises important questions about the coherence and credibility of the Union’s enlargement strategy. Progress with an advanced Nordic partner could generate political momentum for enlargement but may also risk overshadowing more politically complex accession processes in the Western Balkans and Eastern Europe. Countries that have waited over a decade in the accession queue may perceive accelerated progress for Iceland as evidence of a differentiated enlargement logic driven by geopolitical urgency rather than merit-based conditionality.

The brief therefore situates Iceland within the EU’s evolving enlargement landscape, highlighting how geopolitical considerations—including Arctic security, strategic autonomy, and shifting transatlantic relations—are increasingly shaping accession debates. Ultimately, it argues that the Union must balance strategic opportunities in the North Atlantic with the need to maintain credibility and fairness toward existing candidates, particularly in the Western Balkans. 

You can read the policy brief here.

Dr. Triantafyllos Karatrantos, Research Associate at ELIAMEP, analyzes the new European Union EU Counter-Terrorism Agenda, explaining how rapid changes in the digital environment, increasing online radicalization, and complex geopolitical developments make an adapted and strengthened strategy necessary.

In this context, the EU’s new institutional initiative aims to effectively address terrorism and violent extremism, both in the physical and digital domains, promoting a comprehensive and coherent response within the framework of the ProtectEU Internal Security Strategy.

Read the ELIAMEP Explainer here (in Greek).

The annual report prepared by Eda Gemi, Research Associate, ELIAMEP and Bledar Feta, Research Fellow, Wider Europe Programme, ELIAMEP for the OECD Network of International Migration Experts offers a comprehensive and analytically rich assessment of Greece’s migration landscape during 2024–2025, a period marked by moderated inflows, administrative modernisation, and a more securitised approach to border and asylum governance.

Drawing on the latest statistical data, legislative developments, and administrative practices, the report examines how Greece’s migration system is evolving amid demographic pressures, labour market needs, and heightened scrutiny over fundamental rights compliance. The analysis captures both quantitative trends and qualitative policy shifts, providing an authoritative overview of migration flows, legal residence, asylum procedures, integration policies, labour market participation, and citizenship acquisition.

You can read the full national report about Greece here.

You can read the 2025 edition of International Migration Outlook produced by OECD here.

Key themes explored in the report

• Migration flows and asylum trends: Arrivals surged in 2024 before moderating in 2025, while asylum applications declined and recognition rates fell. Persistent backlogs and a widening gap between arrivals and returns underscore structural imbalances. The period was further shaped by allegations of pushbacks and the temporary suspension of access to asylum procedures for specific categories of new arrivals.
• Legal residence and long-term settlement: The legally residing migrant population continued to expand, reaching 916,697 persons in October 2025. Naturalisation increased, particularly among second‑generation applicants, signalling deeper settlement patterns. Yet administrative delays and reliance on temporary certificates heightened precariousness for long-term residents.
• Labour market and integration: Migrant labour participation remained strong, with unemployment among foreign nationals dropping to 9.7% in Q3 2025. Integration governance consolidated further, especially for unaccompanied minors, while increasingly linking residence and protection to labour market participation, reflecting a shift toward conditional inclusion.
• Reception, enforcement, and border management: Island reception centre populations fell sharply, indicating decongestion. At the same time, enforcement intensified, particularly in return policy, while irregular stay apprehensions declined. These developments unfolded against a backdrop of growing domestic and international scrutiny.

A governance model at a crossroads

The period 2024–2025 emerges as a transitional yet tension‑filled phase in Greece’s migration governance, marked by a structural rebalancing between administrative consolidation and intensified enforcement. While arrivals moderated in 2025 after the sharp increase of 2024, pressures on the asylum system remain substantial, reflected in expanding backlogs, declining first‑instance recognition rates, and persistent disparities between arrivals and effective returns. Administrative digitalisation, procedural streamlining, and the expansion of selected legal and investment‑based migration pathways signal efforts toward institutional modernisation and closer alignment with EU standards. At the same time, a more restrictive and securitised orientation has taken hold, exemplified by the temporary suspension of access to asylum procedures for specific categories of new arrivals and the reinforcement of return enforcement mechanisms, developments that have heightened domestic and international scrutiny, particularly in light of allegations of pushbacks and broader concerns regarding compliance with fundamental rights obligations.

The legal residence framework continues to expand quantitatively, with growth in valid permits and consolidation of long‑term settlement patterns. Yet persistent delays in residence permit renewals and reliance on short‑term certificates have increased precariousness for long‑term residents, undermining legal certainty and stable socio‑economic integration. Integration governance has strengthened institutionally, especially for unaccompanied minors and other vulnerable groups, but the growing linkage between protection status and labour market participation reflects a shift toward conditional, economically driven inclusion.

Taken together, developments during 2024–2025 point to a migration governance model at a crossroads, where selective openness and administrative modernisation coexist with deterrence‑oriented measures and heightened enforcement. The long‑term sustainability of this evolving approach will depend on Greece’s ability to reconcile control objectives with procedural safeguards, social cohesion, and the protection of fundamental rights.

Catherine Boura, Ambassador (ad hon.)

Why women in diplomacy

Women –as professionals– in diplomacy is, in fact, a rather recent development/phenomenon. Historically, diplomacy has been the preserve of men, and women were either absent or excluded from any official diplomatic business.  There were of course Exceptional women, such as Gertrude Bell, Freya Stark, the Armenian Diana Abgar, Hungarian Rosika Schwimmer, the Bulgarian Nadezhda Stanchova, who were offered posts or recruited temporarily for their special knowledge of geographical areas; they remained, however, for a long time an exception. It was in 1924, that a Russian revolutionary, Alexandra Kollontai, earned the distinction of being the first female to be appointed Ambassador, to Oslo. Born into a wealthy landed family, Kollontai, lived many years in Europe as an exile, was steeped in European culture and was fluent in many languages. She was ideally qualified for the Bolshevik regime’s bid to win over western public opinion in the post-revolutionary years. Her appointment created a precedent that did not go unnoticed in the European capitals, but it was attributed to the fact that she was an ‘uncommon’ and ‘exceptionally capable woman’.  It was a few years later, in 1933, that the appointment of an American, Ruth Bryan Owen as US head of mission to Denmark created a stir and offered ammunition to supporters of women’s admission to the diplomatic service – at least in Britain. Nevertheless, the legitimacy of women’s participation in the professional diplomatic arena remained contested for the most part of the twentieth century. Foreign Services did not gain a critical mass of women officers until the late 1980s. Once the bar was lifted, women did not pursue a ‘women agenda’ and worked hard to pursue their careers without any gender distinction. International bodies, such as the UN, played an important role building women’s power to intervene in debates and reframe global norms. In the 21st century, women reached unprecedented levels of representation in diplomatic posts and international organisations.  Today, they have finally made their impact on diplomacy. But we are still talking about women in diplomacy. On 20 June 2022, the UN General Assembly declared   24 June International Day of Women in Diplomacy to remind the world that, while women’s numbers in diplomacy are growing, significant barriers and challenges still remain.

One may ask, why is it so important to underline the role of women in diplomacy. I will limit my arguments to three aspects: i) gender equality, ii) because of what they bring in diplomacy, (with special focus on peace and security) and iii) role models for more balanced societies.

I will start with the obvious: gender-equal leadership is implemented with a strong presence of women in leadership roles, including women ambassadors. How can diplomacy flourish if it does not reflect the gender diversity of the nation or the global populations it seeks to serve?

Having said that, one might immediately ask:

Is women’s participation in diplomacy meaningful and worthwhile?

My immediate answer would be: Yes, it is.

Why? Because of their contribution to promoting issues pertaining to civil society, and because of their impact on diplomatic practices and policies that promote peace and security on a global scale.

Issues related to women are inextricably connected with the lives and the security of communities and societies. Evidence collected in relation to several conflict cases has shown that conflict was preceded by a history of violence against women and girls in their societies. Gender violence, domestic violence, and the social marginalization of women, affect the overall behavior of a society and generate risks for its immediate environment and consequently for regional security. Where women are marginalized and disempowered, violence is higher and usually accompanied by other forms of hate that affect the overall behavior of a society.

It was women Ambassadors at the UN who brought the issue of women in conflict situations into the conversation: Sexual slavery, trafficking, the prostitution of children etc, are recurrent during conflicts. For years, the atrocities and appalling abuses committed against women and children in conflict situations were systematically neglected and not an item on the peace and security UN Agenda, in the period before women participated in UNSC working sessions.  It was during the 1990s, initially due to the insistence and championing of a woman diplomat -the US Ambassador to the UN, Madeleine Albright – with the support of other women diplomats at the UN, that these issues were discussed in the context of peace and security.  Some argued that this was cultural and that there was nothing to be done about it. Women diplomats insisted that it was criminal and that the international community bore the responsibility for stopping it.

This precipitated change: After long and persistent efforts, UNSC Resolution 1325 on Women, Peace and Security, voted on in 2000, incorporated the three dimensions: the protection, promotion and participation of women at all levels of decision-making, as a key component in peace. What was agreed then has still to be fully implemented but building on this Resolution, issues such as enslavement and rape as weapons against opponents, gender violence, the trafficking of women and children, and many more, are now seriously addressed.

Women’s inclusion is inextricably linked to sustainable peace. As the path to peace is through exchanges and dialogue, compromise and negotiation, it is important to achieve a “male-female consensus” as male and female experiences are both part of a situation.

Therefore, ways   to bring women into the process need to be devised. This is not, however, just about formal participation. Women cannot be brought in overnight to simply address the gender balance at a negotiation table. In order to create sustainable peace, ways to bring women into peace processes at different levels need to be introduced. For instance, an example could be set by including women in the team of mediators.  In certain parts of the world where gender segregation is prevalent, female diplomats/negotiators can serve as a vital bridge for bringing women into peace processes at different levels. Female diplomats/negotiators can be effective because they have access to areas and sectors of society that are otherwise restricted to male diplomats. They can have access to women who have been victims and encourage societies to listen to the voices of their vulnerable members, and facilitate it.

Last argument: role models. Societies are different throughout the world, and women’s rights are not understood in the same way everywhere. Women in diplomacy promote role models in the general process of female advancement in any field, and constitute a benchmark on the trajectory toward gender-equality and toward more balanced, inclusive, peaceful societies.

Looking into the future, one may ask how different the world would be if women played a more central role in diplomacy.  I would argue that it would not change the world by itself; women are not better, or inherently more peaceful.  But nor should they be viewed as passive and helpless. It is important that their voices are heard.  Women’s diplomatic skills can certainly contribute no less than men’s to resolving conflicts, fostering peace, and promoting reconciliation and good neighbourly relations.

The world today is facing new challenges and undergoing a tremendous transformation in an environment of continuous uncertainty and change. Contemporary challenges, from war and humanitarian crises to sectarian and violent extremism, from poverty and inequalities to climate change and environmental degradation – to mention just a few of the challenges we face in our complicated and unpredictable world – all come with an increasing need to re-imagine the future and prepare for it.

Therefore, the questions we need to ask now are: How do countries want to shape their future? How do they want to contribute to it?  How do they see their interests being advanced in it? And is there a role for women in this future?

The answer is this: yes, there is a role for women as much as there is one for men.  Empowering women and promoting their active participation in decision-making positions in a spirit of partnership, mutuality and equality within the wider societal arena can only enhance trust and equip societies to better serve national interests for security and prosperity.  Skillful, well-equipped and well-educated diplomats, both male and female, can play an important role in the future we want. Diplomacy has historically been both a function and a determinant of regional and global orders. To be effective, it requires political entities with the willingness to communicate. Illuminating women’s role in diplomacy shows us how diplomacy can work more broadly.

Ekaterini Nassika, Ambassador

Women and diplomacy

It goes without saying that this is another quintessential equality issue. If a woman possesses the desire, the capability and the merit, she must have unhindered, legally-enshrined access to every profession. Within the Greek Foreign Ministry, this has been the reality for at least half a century. Ideally, we should have standardized global metrics—perhaps provided by the UN—for all its member states. Are there women serving in every diplomatic service? At what percentages? Where are women still barred, by law or social convention, from pursuing a career in diplomacy?

Such prejudices have deep roots; I had to deal with them myself in the early days of my career, but not anymore. At the Hellenic Foreign Ministry, we have achieved more than just numerical parity in the diplomatic branch, we have secured equal opportunities for a successful career.

Do women offer something distinct? In diplomacy, in negotiations of all kinds, in mitigating problems confronting our societies, I believe they do. That something different is a less aggressive, less confrontational approach.

To clarify, I believe that women are, for various reasons, naturally closer to the true essence of diplomacy. It is a return to its roots. Women tend towards a more consensual approach to problem-solving, even when dealing with the most intractable issues. We believe in common sense and don’t feel the need to display our strength or show how tough we can be. Unless, of course, the situation demands it!

I don’t want to sugarcoat the reality. Our profession, especially when looked at from the outside, appears far less demanding than it actually is.

My thoughts lately are often with my colleagues in Kyiv, and especially my female colleagues in Tel Aviv, Beirut, Amman, and Riyadh. They provide vital intelligence, represent our country with distinction, negotiate, and protect our fellow citizens abroad—all while being forced frequently into underground shelters. They remain foremost in our minds and held in the highest regard. Well deserved.

Vasiliki Gounari, Ambassador, Permanent Representative of Greece to NATO

The growing presence of women in senior positions within Greek diplomacy is a welcome development. As the first woman to serve as Greece’s Permanent Representative to NATO, I am keenly aware that my own path reflects a broader shift: the steady and meaningful expansion of women’s role in shaping our country’s foreign policy.

The different stages of my career—from work on disarmament and non‑proliferation to the EU’s Common Security and Defence Policy, and including the honour of being Greece’s first woman Ambassador to the Political and Security Committee—have shown me how essential it is for our diplomatic service to draw on the full range of its talent. These experiences have reinforced my belief that diverse perspectives strengthen our ability to engage, negotiate, and contribute effectively in multilateral settings.

The increasing number of women in positions of high responsibility is a sign of institutional maturity. Their contribution is not simply a marker of progress; it enhances the quality, credibility, and effectiveness of Greek diplomacy, supporting dialogue, cooperation, and the confident representation of our country on the international stage.

My hope is that diplomacy will continue to become more inclusive, making room for all those who wish to serve. I want the next generation—women and men alike—to find the space to contribute, to innovate, and to represent Greece with dedication and vision.

Natalia Panourgia, First Counsellor, Unit for Equality, Office of the Secretary General, Hellenic Ministry of Foreign Affairs

In 2022, during its 76th session, the United Nations General Assembly declared June 24th as the “International Day of Women in Diplomacy” to be observed annually, in recognition of the women’s contribution to international cooperation and peace. In a historically male-dominated field, women diplomats serve with remarkable effectiveness. They often bring new perspectives, creativity and collaborative approaches which substantially enhance the quality and impact of a country’s diplomacy.

The Hellenic Ministry of Foreign Affairs actively champions the meaningful participation of women in diplomacy, both as a key element of our country’s foreign policy and within its own institutional framework. As part of its commitment to gender mainstreaming, the Ministry established a Unit for Equality in 2024 and adopted an Equality Action Plan 2024-2027. This Plan sets forth tangible objectives, including staff training and awareness, the promotion of gender-inclusive language in administrative documents, the development of gender-disaggregated statistics, and the advancement of equal representation in leadership roles. Positive trends are already evident regarding this final objective: the percentage of women serving as heads of Greek Diplomatic Missions abroad increased from 35% in 2023 to almost 38% in 2026.

In a world defined by multiple challenges— armed conflicts, climate crisis, emerging technologies—the equal participation of women in diplomacy ensures more representative, inclusive and resilient policies, ultimately bolstering the quality of our country’s international presence.

 

Ino Afentouli, Senior Policy Advisor; Head of the Geopolitics and Diplomacy Observatory, ELIAMEP

Barring those directly threatened by Russia’s invasion of Ukraine, and despite the vast financial and military support their countries have provided, the peoples of the EU never felt that this war was “theirs”. And yet, this was the first military conflict in the heart of the continent since the end of World War II. This repression of the threat of war is largely due to the culture of peace that has been cultivated in Europe over the last eight decades—a culture encapsulated in the phrase “Never Again”. It is also the result of the institutional framework designed to ensure that disputes between European nations are resolved peacefully. Today, the nations of Europe find themselves confronted by a second war; though it is not being fought on their own soil, it poses an equally grave threat to their security.

In both the Ukrainian and the Iranian contexts, the nations of Europe are contending with the fallout from conflicts they neither chose nor planned, and over whose trajectory they lack meaningful control. Nonetheless, these are conflicts that will inevitably impact both the peoples and institutions of Europe. In other words, the present juncture is reminiscent of the summer of 1914, when our continent sleepwalked into the First World War. Now, as then, Europe remains unprepared.

The conflict with Iran, to which Greece and Cyprus are the closest European nations, will be protracted and is already escalating into a broader regional struggle. If Turkey, Syria and Lebanon should get involved, whether directly or indirectly, the consequences for us will be dire. The pre-emptive deployment of Greek forces to Cyprus underscores this reality. Even if the institutions to which we belong, the European Union and NATO, were to trigger their collective defence mechanisms, it would signify that our nations are facing a peril of the highest order. Regrettably, should this worst-case scenario materialize, we will be faced with a second European war, this time with the Eastern Mediterranean at its epicentre.

Triantafyllos Karatrantos, Research Associate, ELIAMEP

The ever-evolving regional security environment in the Middle East

The US-Israeli military conflict with Iran is another—and likely the most important critical—chapter in an ongoing reconfiguring of the Middle East’s security architecture and alliances. The process began after the terrorist attack launched against Israel on 7 October 2023 and the rapid succession of military and geopolitical events that followed it. Since October 2023, we have seen the systematic curtailing of Iran’s power, primarily by Israel. Initially through the weakening or overthrow—as in the case of the Assad regime—of the members of the infamous “Axis of Resistance”, the network which had effectively established Iran as a dominant regional actor. The region has changed radically in the period since the initial attacks: the Assad regime has fallen in Syria; Hezbollah, Hamas and various Shiite militias and paramilitary forces that acted as hybrid proxies for Iran have sustained crippling losses; and the Houthis have seen their influence severely diminished.

Iran had previously exploited the power vacuum created by Washington’s substantial disengagement from the region after 2011. This dynamic has now shifted so fundamentally that Tehran has not only lost its regional power; its theocratic regime is currently fighting for its survival.

Furthermore, Iran’s targeting of neighbouring states has failed to drive a wedge between them and the United States; instead, these provocations have pushed countries like Saudi Arabia into adopting a formal stance against Iran.

Israel has emerged with bolstered regional power and influence, appearing ready to resume the momentum of the Abraham Accords, which had stalled in the aftermath of the October 7 attack. However, it remains to be seen how Israel’s relations with the Arab nations will develop from here—most notably with Saudi Arabia, with which a landmark normalization deal was imminent prior to the conflict. Riyadh, alongside other Gulf countries like Qatar, has also seen its regional standing strengthened.

Nevertheless, the regional picture remains complex. Israel’s fraught relationship with Syria and Turkey—the latter of which also seems to be losing some of its previously amassed regional influence—must be taken into account.

Ultimately, the discourse surrounding a new security architecture cannot be finalized without considering the ultimate fate of the Iranian regime and the broader post-conflict landscape for the country. While the threat from Iran’s missile arsenal and proxies could be reduced, and its nuclear ambitions thwarted, we may see growing extremism, or even the emergence of new—or the evolution of existing—Shiite Islamist militant organizations.

Ultimately, the US has made a dynamic return to the Middle East and it remains to be seen how its rivalry with China and Russia will evolve within the region’s new geopolitical context, while it has become increasingly clear that the European Union must now develop its own distinct geopolitical footprint in the region.

Pantelis Ikonomou, Former Inspector, International Atomic Energy Agency; Research Associate, ELIAMEP

The reality about Iran’s nuclear weapons and the war

A list of the factual drivers, not a justification(!), of the actors involved in the Iranian crisis:

• It is widely held that “the capability to acquire nuclear weapons carries as much strategic weight as their actual possession” (for a historical analysis, see my book Global Nuclear Threat, [2019, in Greek], in which the above serves as an epigraph).
• Tehran utilizing its Possible Nuclear Military Capability since 2013 as strategic leverage to advance its international agenda.
• The landmark diplomatic agreement of 2015: the Joint Comprehensive Plan of Action (JCPOA) placed Iran’s nuclear programme under stringent international oversight.
• The implementation of the JCPOA, which widened Iran’s breakout window (the time required to acquire the amount of fissile material required to build a nuclear bomb) from two to ten months, effectively containing the situation,
• Israeli Prime Minister Netanyahu adamantly declaring since 2013 that “no deal will be a good deal”.
• US President Trump’s unilaterally withdrawing the US from the JCPOA in 2018 and reinstating sanctions against Iran. This counter-intuitive decision effectively reduced Iran’s breakout window back to a mere two months.
• Tehran ceasing to comply with the terms of the JCPOA in 2019/2020, following a series of targeted assassinations of Iranian politicians, military officers and scientists. Iran obstructing and ultimately barring International Atomic Energy Agency (IAEA) inspectors from conducting meaningful oversight of its nuclear programme since then.
• The absence of a credible guarantee since then that Iran is not weaponizing its nuclear programme. Logically, however, had Iran already developed a nuclear capacity, it would have announced it to deter attacks against its territory.
• Israel’s status as an undeclared nuclear-armed state. As it is not a party to the Non-Proliferation Treaty (NPT), it is under no obligation to submit to international inspections. Nevertheless, this status affords Israel a decisive strategic edge and underpins its geopolitical standing in the region.
• A fundamental divergence in the objectives of the parties involved in the escalating conflict: For Iran, the goal is to annihilate Israel. For Israel, it is to dismantle the Iranian state. However, for the US, the ultimate goal remains ill-defined. It is likely linked to Trump’s mercurial temperament and narcissistic need to perform on the world stage.
• Trump’s irrational withdrawal from the JCPOA, followed by the impulsive decision to join the Israeli attack on Iran in June 2025—against the explicit counsel of his own national security advisers—points towards an absolute, if unexplained, subservience to Israeli interests. Historically, no American president (Obama, Bush Jr, or Biden) has ever sided with Israel in a war against Iran.
• The historical root cause of the crisis: the pogroms perpetrated by Christian Tsarist Russia in 1881-1906 against 2.5 million Jews; the anti-Semitic campaigns of Stalin’s Soviet Union after World War II; and, finally, the Holocaust in which six million Jews were killed by Hitler’s—likewise Christian—Germany. These events led the global powers, acting through the UN in 1948, to establish a state of a few million Jews in Palestine—a state surrounded by a few hundred million Muslims.
• A pervasive indifference to the existential fallout currently confronting not only world Jewry and the Palestinians of that land, but the entire planet.
• A personal observation from a natural sciences perspective: the tendency towards chaos and disorder, which is the defining characteristic of universal entropy. In this shared journey, power imbalances are driving the collapse of hegemonies and the emergence of unpredictable multipolar shifts. We may also be experiencing the twilight of the American West. Unfortunately, the consequences remain impossible to foresee.

Eleni Ekmetsioglou, Non-Resident Fellow, ELIAMEP

The French President gave a much-awaited speech at the French strategic submarine force (FOST: Force Océanique Stratégique) base of Ile Longue in Brittany, last Monday (02.03.2026). It was a historical moment for France and an even more critical event for the future of the European continent. Even though the European dimension of France’s vital interests has been highlighted many times in the past by all Presidents since François Mitterrand, Emmanuel Macron is the first president that acted upon this claim and created the basis for a European cooperation scheme on nuclear deterrence. The scheme comprises of bilateral agreements with seven states – Germany, Netherlands, Belgium, Greece, Poland, Denmark and Sweden- at the heart of which lies the coordination on conventional support of nuclear operations, what the French call ‘épaulement’.

As a reminder, France is estimated to have about 290 nuclear warheads. The French nuclear arsenal encompasses four nuclear submarines (SSBNs) that can carry up to 64 nuclear warheads each in its MIRV’ed Submarine Lunched Ballistic Missiles (SLBMs). In addition, the French nuclear arsenal includes two squadrons (40 aircraft in total) of nuclear capable Rafale aircraft (Force Aérienne Stratégique) where the nuclear warhead is delivered by a mid-range cruise missile, the ASMPA (air-sol moyenne portée-amélioré).

Continuities and discontinuities in Macron’s speech

The French, to their credit, worked hard to adapt and adjust their very unique nuclear posture in a way that is fitted for the challenging geopolitical environment Europe is faced with these days. Within this context, some components of the French nuclear posture were left to the past while others were repeated and further highlighted. What was not negotiable for the French side was their absolute control over the planification, implementation and ultimate use of the nuclear weapon in the event of crisis. While President Macron for the first time introduced the term ‘forward deterrence’ (dissuasion avancée) to extend French protection over its partners, he did highlight that France would not be dragged into others’ wars and that the definition of France’s vital interests will lie within the President’s responsibilities only and with no exception.  Another important continuity was France’s explicit rejection of battlefield nuclear weapons reiterating its commitment to regard the nuclear bomb as a strategic weapon that is militarily unusable and only politically useful within the context of deterrence.

Continuities aside, some important modifications to France’s nuclear posture were mentioned in the speech. President Macron announced that France will further consolidate its tritium production and that it will seek to increase its number of nuclear warheads escaping from France’s cherished principle of ‘strict efficiency’ (stricte suffisance). It was stressed that the exact numbers will not be disclosed, and that France will no longer be transparent about the size and the composition of its nuclear arsenal. Another principle that was left to the past was the term ‘dommages inacceptables’ (unacceptable damage). In previous articulations of its nuclear posture, France claimed to cause unacceptable damage to the adversary that would threaten its vital interests with the possibility of firing a warning shot when the President fell that the nature of the conflict was about to cross the nuclear threshold in order to reinstate deterrence. On March 2nd, however, the French President did not talk about causing unacceptable damage to the adversary anymore but instead he highlighted that France’s posture will be centered around a nuclear strike the adversary would not be able to recover from. This raises a number of questions about France’s targeting policy. Based on France’s nuclear history, one could hypothesize that the new posture is a more expansive version of its traditional countervalue strategy. However, the way Macron phrased it leaves room for one to wonder if France’s targeting policy has been modified towards the inclusion of strikes against military targets that could either seriously degrade or critically complicate the enemy’s implementation of its nuclear operations. For instance, even though urban centers might remain as the main targets, some critical nodes of the enemy’s nuclear operations such as Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) centers could be targeted as well in order to prevent the enemy from carrying out their nuclear operations. The strategic ambiguity here is intentional but we should highlight that a mix of both urban and military targets will require investments in Intelligence, Surveillance and Reconnaissance (ISR) for engagement with fleeting targets or even HUMINT intelligence for the location of critical nodes in the adversary’s nuclear arsenal. The intentional ambiguity notwithstanding, a more expansive countervalue targeting policy is within current capabilities and in harmony with France’s nuclear doctrinal tradition.

Forward Deterrence: What It Encompasses & Why the Conventional Pillar Should Be Highlighted

But what does forward deterrence really mean and how does it translate into actual domains of cooperation? For now, the term is the overarching concept under which a number of activities will take place: joint exercises, signaling during crisis, deployment of French strategic aircraft (FAS) on allied territory leveraging the strategic depth of the European continent in order to disperse nuclear platforms and increase their survivability. The deployment of French strategic forces on allied territory will be under specific circumstances (circonstancielle) which alludes to crises, but the French President refrained from being more specific, which could give room for alternative interpretations.

The most important part -the actual cornerstone of France’s forward defense posture one could argue- is the cooperation of all partners on conventional support for nuclear operations; something that is known amongst NATO partners as CNSO (Conventional Support of Nuclear Operations). Conventional support is broken down into three pillars: a. the creation of Early Warning capabilities for the detection of incoming ballistic missiles b. missile and drone defense and c. conventional deep strike capabilities. It needs to be highlighted that even though the speech has been about upgrading Europe’s nuclear deterrent, the conventional component should be regarded as equally important. The creation of a small group of partners who will exchange knowledge, experiences, technical and scientific know-how on ISR or deep strike capabilities has the potential of spilling over towards the creation of a tight network of capabilities across the kill chain. Cooperation on Early Warning systems through ISR collaboration and intelligence sharing is the first step towards the creation of a network where the sensors will send real time information to Command & Control Centers (C2) for information processing and then straight to interceptors for missile or drone defense. Successful deep strike capabilities are also dependent on intelligence sharing and collaboration on ISR which further intensifies the need for flawless cooperation through interconnectivity and interoperability. Put differently, conventional deterrence is the pillar of a credible nuclear deterrence. If preparations for conventional operations are carried out successfully, then the whole effort has the potential of ‘locking’ states into a web of interconnectivity and deep leveled cooperation where absolute synchronization along the kill chain will have the potential to increase lethality and military effectiveness in the theater of operations. In a nutshell, even though Macron’s speech was, prima facie, about nuclear deterrence, if one scratches beneath the surface, the project has important potential for enhancing cooperation in the conventional domain and, in specific, in three fields that are of paramount importance for future warfare.

Lastly, something that we need to keep in mind; President Macron called the initiative a work in progress (démarche progressive). This gives the impression that the cooperation scheme that France has put forward under its leadership is a malleable structure where partners can shape their own contribution based on what it is that they are willing to offer and how they want to benefit from their participation. Joint exercises, deployments of FAS Rafales abroad and the conventional coordination for nuclear operations are just the starting points. Within the context of this smaller group of European partners, collective action should be easier and cooperation prospects promise to be more dynamic. The bilateral deliberations will continue, and it remains to be seen how each partner will shape its participation and contribute to the scheme.

The Enemy Within: Lack of Nuclear Strategy Expertise When it is Most Needed

After the end of the Cold War, nuclear weapons scored very low on countries’ lists of priorities and nuclear expertise was no longer needed. From the ‘90s onwards, we saw the golden age of arms control where the emphasis was put on technical knowledge for supporting the treaty verification regimes. The nuclear shadow over world politics faded away and gave its position to optimism about the future of humanity away from the prospect of a nuclear conflagration. And yet, sadly, nuclear weapons are back to haunt inter-state relations and all the expertise that was dismantled needs to be rebuilt while taking into account both traditional theories and models but also, and most critically, the new features of our current international environment.

Therefore, while Europe takes its nuclear deterrent more seriously and policy makers continue bilateral deliberations towards new concepts and postures, it is paradoxical that the biggest enemy of a credible European nuclear deterrent is not Russia’s or China’s nuclear arsenals but the wider lack of nuclear strategy expertise within a shrinking nuclear policy community. The nuclear bomb is above everything else a strategic weapon which implies that more involvement by educated and informed civilians is necessary. We need an active and dynamic nuclear policy community to serve two goals: a. work in tandem with governmental institutions, brainstorm and provide innovative ideas to decision makers and b. hold policy makers accountable pushing states towards responsible nuclear policies that avoid unnecessary risks.

Taking a step further, we need to leverage new knowledge on nuclear strategy apart from the traditional theories. After the end of the Cold War, access to archival data in the US, Russia and Europe led to the production of a big volume of knowledge in Cold War nuclear history, nuclear cultures and the diversity in state views with regard to the requirements of a credible deterrent. Modern nuclear policies need to be informed by and learn from Cold War events and the experiences nuclear powers had to go through. At the same time, apart from looking back into historical lessons, we need to keep our eyes open for the particularities of our strategic environment such as the emergence of new technologies and their impact on nuclear postures, strategy and doctrines. New technologies create the illusion of escalation control breathing fresh air into damage limitation and nuclear warfighting doctrines that, however, increase the chance nuclear use in the future. This creates a strategic environment that is even more complex and challenging that the Cold War one. For all these reasons, we need experts from a diversity of fields to voice new ideas and share their expertise with governmental organizations supporting them in their critical mission of nuclear deterrence in this very challenging strategic environment.

Any attempt to build a credible European deterrent will be incomplete if it is not married to an investment in the intellectual capital of a wider nuclear policy community that will serve as the free market where ideas will circulate, policies will be discussed, critiqued, legitimized or rejected. A nuclear policy community that will serve as the bridge between decision makers and the public opinion that needs to remain informed and part of the wider discussion. President Macron and partner states did the first step towards a credible European nuclear deterrent. For this effort to be sustained, we now need to start working on building the intellectual capacity that will underpin Europe’s nuclear peace.

 

• In the contemporary environment, economic diplomacy encompasses four key dimensions: (a) trade/investment diplomacy, (b) the diplomacy of international rules and agreements, (c) development cooperation, and (d) economic security diplomacy.
• In Greece, the system of economic diplomacy is organised around the General Secretariat of International Economic Relations and Openness of the Ministry of Foreign Affairs. At the same time, other ministries and government services also play an important role, creating a complex institutional ecosystem in which coordination is necessary in order to enhance the effectiveness and efficiency of the relevant actions.
• Although the importance of economic diplomacy is recognised and relevant initiatives have been undertaken in the right direction, both at the level of organisation and at the level of actions, the main challenges that Greek economic diplomacy continues to face are: (a) the absence of a holistic approach and strategy, (b) the tackling of bureaucracy and business barriers, (c) limited resources, and (d) insufficient recognition of its value.
• International practices, such as the Team Finland network, the French model of special representatives for economic diplomacy, as well as the national strategies of the Netherlands and the United Kingdom for the creation of a national economic identity, constitute some good practices followed in Europe and may, under certain conditions and with appropriate adjustments, inform relevant Greek initiatives.
  • The policy recommendations are structured on the basis of three categories:
  • Structure and organisation:
    • Strengthening Enterprise Greece,
    • Reorganisation of the recruitment and training system for officials of the Offices of Economic and Commercial Affairs (OEY).
  • Operations and adaptability:
    • Enhancing relations with local and sectoral chambers of commerce,
    • Establishing a formal consultation mechanism for direct interaction with the “users” of economic diplomacy,
    • Modernising procedures, following a detailed mapping of the needs and obstacles faced by the stakeholders involved,
    • Providing tailored services by Offices of Economic and Commercial Affairs based on the size, and therefore the needs, of businesses,
    • Better utilising the Greek diaspora and Greek communities abroad.
  • Formulation of a strategy for economic diplomacy:
    • National dimension:
      • Creation of a National Strategy for Economic Diplomacy with a horizon beyond 2030, with a central role given to the geoeconomic dimensions of economic diplomacy,
      • Raising the visibility of a unified Greek “brand name”.

• European Dimension:
  • Promoting the idea of establishing a European Export Credit Agency, while recognising the relevant reservations expressed by our partners in the EU – the Greek Presidency of the Council of Ministers in 2027 could provide an opportunity to further explore this idea,
  • Achieving a positive “pillar assessment”, in order for Greek institutions to become eligible for the financing of actions in third countries,
  • Promoting and implementing, particularly during the Greek Presidency of the Council of the EU in 2027, measures aimed at completing the Single Market, on the basis of the Draghi and Letta reports,
  • Increasing the number of Greeks serving in key positions in European institutions, as well as hosting new European agencies in cities across Greece.

Read here in pdf the Policy paper by Spyros Blavoukos, Professor, Athens University of Economics & Business; Senior Research Fellow and Head of the ‘Ariane Condellis’ European Programme, ELIAMEP; Panos Politis Lamprou, Research Fellow, European Institutions & Policies, ELIAMEP; Panagiota Pagoni, Research Assistant Trainee (January–September 2025).

This entry is available in Greek.

Cover photo: publicdomainpictures.net

Panagiota Manoli, Senior Research Fellow, ELIAMEP; Associate Professor at the University of the Peloponnese 

Despite the recent revival of EU’s enlargement policy as a result of the EU’s geopolitical awakening of 2022, elites in candidate countries still perceive accession as a perpetual goal. The continually evolving accession conditions and extended candidacy periods have weakened the policy’s predictability and credibility. A survey conducted within the framework of the Geo-Power-EU project (2025)* showed the gap between the declared objectives of the EU’s enlargement policy and the perceptions held by the elites of the candidate countries.

On the EU side, enlargement is viewed as progressively advancing through partial integration mechanisms. EU policymakers, emphasize gradual integration through the single market, Growth Plans, Association Agreements, and DCFTAs as evidence of steady progress, viewing progress as dependent on the candidates’ commitment to reform. On the contrary many candidate-country elites, especially among long-standing candidates, see limited progress toward full membership. Elites in the Western Balkans, report that accession conditions have continually shifted (e.g. ICTY cooperation, regional relations) or taken hostage of bilateral disputes (e.g. most recently between Bulgaria and North Macedonia) creating a perception of deferral rather than progression, undermining confidence in the process. Accession process is commonly described as stagnation and technical engagement without political certainty. One of the most significant negative developments is that prolonged candidacy has contributed to public fatigue, rising Euroscepticism, and disincentives for reform. Among the new EU candidates in eastern European neigbourhood, Moldova and Ukraine (except for Georgia) exhibit cautious optimism following their fast track candidate status (2023) and technical progress, though it is acknowledged that security challenges necessitate flexible accession models.

Most EU elites are more concerned about the Union’s own capacity to absorb new members, arguing that enlargement must be matched by internal reforms to safeguard effective governance and institutional resilience. While geopolitical pressures—particularly related to security and stability—are widely acknowledged, they are also seen as pushing the EU toward enlargement decisions that may exceed its institutional limits. Fast-tracked or expedited accession processes are mostly dismissed, as they risk overstretching EU institutions, financial resources, and policy frameworks, ultimately undermining the effectiveness of the Union.

As the European Union weighs expansion to include the Western Balkans and eastern neighbours like Ukraine and Moldova, it must navigate a strategic tension: how to reconcile the principle of merit-based accession with geopolitical urgency, without undermining the deepening and cohesion of integration itself.

*Note: The results of an elite survey conducted in all 9 candidate countries in Spring 2025 within the framework of the Geo-Power-EU project (funded Horizon Europe and coordinated by the University of the Peloponnese) are presented in Deliverable D2.1. “Discerning the perceptual gap between the EU policies and the countries’ expectations and needs”.

• High-quality early childhood education and care helps children’s early development and positively affects educational, social and economic outcomes in later life for the children involved and for society at large. Conversely, the lack of affordable high-quality childcare creates deficits in abilities and skills, including soft ones, which raise social costs and drive down productivity.

• Compulsory pre-school education in Greece has recently been extended, now starting at age 4. Nevertheless, participation in early childhood education and care at a younger age remains below the European average. Limited availability of affordable subsidised places is a key obstacle to raising enrolment in childcare centres.

• The Recovery and Resilience Facility (RRF) offered Member States generous funding for investing in childcare. This is especially important in countries like Greece, where female employment– though rising – remains low, which reflects the difficulties Greek women face in reconciling career and family responsibilities.

• Greece 2.0, The National Recovery and Resilience Plan, included measures to improve childcare quality and expand access. While some initiatives began, most were later abandoned, highlighting the fragility of reforms amid institutional bottlenecks.

• Despite setbacks, ECEC has gained some visibility in national debates. Yet without a long-term fiscal commitment and a coherent national strategy, it will be difficult to expand access for children under the age of 2, improve quality, and ensure equity in a sector that has historically been underfunded and neglected.

Read here in pdf the policy paper by Chryssa Papalexatou, Research Fellow, ELIAMEP.

Elena Lazarou, Director General, ELIAMEP

The 2026 Munich Security Conference gave the sense of a forum negotiating the terms of what comes next. The tone was measured, but the subtext was unmistakable: the assumptions that underpinned three decades of relative geopolitical coherence are eroding. What replaces them remains unsettled. On the positive side, it could be an opportunity.

Three core dynamics defining Munich this year were particularly interesting: transatlantic recalibration, the rising agency of middle powers and the Global South, and the expanding definition of security itself to match the geotechnological nature of our times. These trends are not new: they echo debates and concerns from previous years, but the discussion has evolved and the participants have matured and diversified.

Transatlantic Recalibration?

There was no open rupture between Europe and the United States. Yet neither was there a return to complacency. European leaders continue to affirm NATO’s centrality, yet strategic autonomy is no longer abstract rhetoric. From defense industrial capacity to energy diversification and digital infrastructure, Europe is hedging against systemic volatility. For the United States, alliance unity remains central but increasingly framed through domestic political sustainability – and domestic competition of identity related narratives. At the same time, for the European audience, one thing is clear: burden-sharing and alignment must be reciprocal and measurable. The transatlantic relationship is indeed recalibrating. And while the point was made that partnership endures; dependency does not.

Middle Powers and the Global South: From Participants to Architects?

No one knows dependency as well as some of what we now refer to as the middle powers of the ‘Global South’. Perhaps the most striking shift in this year’s Munich was not in what Western leaders said, but in who spoke with confidence. Middle powers — India, Brazil, the Gulf states — are no longer navigating between blocs; they are shaping the environment in which blocs operate. Their diplomacy is pragmatic and transactional. Engagement is diversified. Alignment is selective. This is now referred to by pundits as ‘multi-vector’ foreign policy and is increasingly appealing to states north and south. It could be argued that it is a return to what we once simply called ‘realist’.

Voices from Africa, Latin America, and parts of Asia present in the Bavarian capital underscored a structural gap (and not for the first time): global governance structures lag behind contemporary realities. Security debates emphasise defence and deterrence but still sideline debt distress, development financing, and climate vulnerability. In so doing, they do not resonate in much of the world.

For many of these countries, instability is fiscal, climatic, and demographic long before it manifests as military or territorial crises. Middle powers and Global South actors are asserting agency — and demanding that the architecture of order accommodate it.

One of the ‘quieter’ but consequential conversations focused on the intersection of development, humanitarian support, and security. Delegates from the Global South stressed that fragile states are destabilized not only by military threats, but by chronic underinvestment in infrastructure, social services, and governance. Humanitarian crises — from conflict-driven displacement to climate-induced food insecurity — are immediate pressures, but short-term aid alone cannot stabilize societies. But rather than just voicing concern, they also offered solutions, or at least proposals. An important one is that predictable development financing is preventive security. Long-term investment in education, health, energy, and infrastructure reduces the likelihood of crises escalating into broader regional instability.

On humanitarian support, experts from across the globe re-emphasized that it must complement, not replace, structural solutions. Emergency aid is essential to alleviate suffering, but without sustained development mechanisms, fragile states remain vulnerable to repeated shocks. Several voices emphasized that equitable financing, and mechanisms to address systemic vulnerabilities are critical to prevent recurring humanitarian crises. This is perhaps more important than ever, as the future of the United Nations and their reform enters the microscope – North and South. An opportunity is there, but a risk too. But the related conversations inside and outside closed doors highlighted a simple but often overlooked principle: stability is built before crises erupt, and humanitarian support is only one pillar in that architecture. Development and crisis response are inseparable in designing durable security strategies. We are focusing a lot on crises these days (in fact ELIAMEP has launched a series of events entitled precisely ‘Crises in Focus’) but we should be doing the same for the other part of security: development.

Technology and Artificial Intelligence: The accelerator?

Technology shaped nearly every conversation. Artificial intelligence, cyber capabilities, digital infrastructure, and data governance are now integral to national power. Competitiveness in AI is by now established as a key source of strategic leverage, which allows states to ‘punch’ way above their size and to do so successfully. It has also changed irreversibly the nature of expertise that is required for geopolitical and foreign policy analysis, thus also becoming an important part of the conversation for the future of think tanks and policy advisory services.

Three undercurrents particularly stood out. First that technological sovereignty equals a degree of strategic autonomy: resilience in digital infrastructure is as fundamental as energy independence and military operational capacity. Second, that we stand at what is only the beginning of a major negotiation on the future of digital governance. From a European perspective, AI governance is seen as a mechanism for stability and for the upholding of fundamental human rights: without a governance framework with clear guardrails, AI-enabled disinformation, cyber disruption, and opaque military applications risk miscalculation. But to reconcile this with Mario Draghi’s urgency for global competitiveness, in a world of less or non-regulated actors, is a challenge. Finally, and related to global development, the AI divide has emerged as a strategic fault line: unequal access risks marginalizing countries and entrenching geopolitical inequality.

Details aside, the big question on everyone’s mind was: will technology set the agenda, or will it accelerate and support agenda setters?

Bringing it home: energy, connectivity and opportunities for Greece?

The Conference reaffirmed that energy and regional connectivity are central instruments of influence and security. European states are recalibrating energy sourcing, infrastructure, and cross-border supply chains to mitigate risk. Connectivity — from transport corridors to ports and digital networks — is not just economic facilitation; it is geopolitical leverage.

For Greece, these insights are particularly relevant. Its geographic position makes it a natural hub linking the Balkans, Eastern Mediterranean, and Middle East. Pipelines, LNG terminals, and interconnections with regional grids enhance both diplomatic leverage and energy resilience. Port and transport projects, including Piraeus and rail networks, strengthen Greece’s role as a regional hub for trade and strategic partnerships. Diversifying energy sources and linking energy and digital infrastructure amplifies national influence and mitigates vulnerability to external shocks. Engaging in multipolar diplomacy and regional connectivity initiatives allows Greece to build flexible coalitions that advance its foreign policy objectives while supporting EU strategic autonomy. Going back to one of the initial points made, multi-vector foreign policies are not just about diversifying partners, it is also about diversifying across policy areas, to raise leverage and set the agenda in as many fields as possible.

All in all, the MSC 2026 did not produce a grand doctrine. Instead, it revealed a world in transition. The international order is not collapsing outright (or under destruction as the catchy title of this year’s MSC publication framed the question). However, it is no longer comfortably anchored. The world is indeed witnessing some of its old assumptions falter. But it is also under renegotiation, and the stakes have never been clearer.

Photo: from the Munich Security Conference 2026 website

Dr Sophia Clément Mavroudis, former Professor at the École de guerre of the École Militaire in Paris and at Sciences Po, provides a concise analysis of the upcoming Greece-France Defense Agreement. Scheduled to be signed in spring 2026, the agreement establishes an enhanced framework for strategic military cooperation, significantly strengthening the defense capabilities of both countries.

Read the ELIAMEP Explainer here.

• Turkey Has Established a Credible Presence in LAC:
  Since 2000, Turkey has expanded trade with Latin America and the Caribbean (LAC) by over 450%, multiplied its diplomatic missions, and secured targeted investments in ports, energy, tourism, and infrastructure.
• Challenges and Competition: Turkey faces competition from China, the EU, and the US in LAC; third-party countries can learn from Turkey’s challenging experience.
• A Selective Middle-Power Strategy Is Driving Results:
  Rather than competing on scale with China, the US, or the EU, Turkey has relied on focused FTAs, business councils, logistics hubs, and niche economic diplomacy to “punch above its weight.”
• Diplomatic Visibility Generates Political Returns:
  Embassy expansion, high-level visits, and engagement with CELAC, MERCOSUR, and CARICOM have translated into multilateral support and increased political recognition across the region.
• Soft Power Compensates for Structural Weaknesses:
  Cultural exports, humanitarian aid via TİKA, scholarships, and media outreach have produced high-impact visibility and goodwill at relatively low cost, despite limited historical or cultural ties.
• Lessons for Third-Party Countries:
  Turkey’s experience shows that sustained engagement, institutional presence, and sectoral specialization can deliver influence in LAC without superpower resources.

Read here in pdf the Policy paper by Ioannis N. Grigoriadis, Senior Research Fellow, Head, ELIAMEP Turkey Programme and Grigoris Patsakis, Project Manager at the ELIAMEP Turkey Programme.

Introduction

Turkey has significantly expanded its economic, political, and cultural engagement with Latin America and the Caribbean.

Turkey has significantly expanded its economic, political, and cultural engagement with Latin America and the Caribbean (LAC), transforming virtually non-existent ties into a dynamic partnership. Since 2000, trade between Turkey and LAC has increased by approximately 450 percent, reaching USD 17.4 billion in 2022. At the same time, Turkish investments in strategic sectors such as energy, tourism, and infrastructure highlight Ankara’s long-term and calculated approach to the region. This expansion is driven by Turkey’s “multi-dimensional” foreign policy, which combines trade agreements, diplomatic outreach, and cultural diplomacy to deepen its presence in LAC.

This policy paper addresses three central research questions: how Turkey’s engagement with LAC has evolved over time; what strategies, challenges, and limitations it faces in the region; and what lessons Turkey’s experience offers to third-party countries seeking to expand their own engagement with LAC. By examining Turkey’s implementation strategies, including free trade agreements (FTAs), infrastructure investments, and cultural diplomacy, the paper assesses both the effectiveness of Ankara’s approach and its broader applicability for other actors pursuing regional expansion.

The paper is structured as follows. First, it provides a historical overview of Turkey–LAC relations. Second, it examines Turkey’s economic, political, and cultural engagement strategies in the region. Third, it highlights key successes as well as persisting challenges. Fourth, it evaluates the overall effectiveness of Turkey’s policies. Finally, the paper offers policy recommendations and identifies transferable lessons for third-party countries seeking to overcome similar challenges in their engagement with LAC. The analysis draws on primary sources, including trade and investment data, as well as secondary sources such as peer-reviewed academic studies, think tank reports, and reputable news articles.

Overall, the paper concludes that Turkey has substantially expanded its diplomatic, economic, and cultural footprint in LAC, carving out niche areas of influence and fostering pragmatic partnerships across the region. Despite constraints related to geographic distance, competition, and the dominance of major global powers, Turkey’s experience demonstrates how a middle-size power can generate tangible economic outcomes and cultivate meaningful relationships, offering valuable lessons and inspiration for other countries seeking to engage with LAC.

A Historical Overview of Turkey–Latin America Relations

Its engagement was renewed in the 1990s, with the 1998 Action Plan and 2006’s “Year of Latin America and the Caribbean”.

Turkey’s first bonds with LAC date back to the early republican years. The League of Nations’ invitation to Turkey to join in 1932 was supported by several LAC states, and Turkey established its first Latin American embassy in Santiago in 1930. During the Cold War, relations stagnated due to Turkey’s NATO alignment. Its engagement was renewed in the 1990s, with the 1998 Action Plan and 2006’s “Year of Latin America and the Caribbean” in particular marking a more structured approach to LAC.

Turkey–Latin America Relations: The Economic, Political and Cultural Landscape

The $14 Billion Question: Turkey’s Economic Diplomacy in Latin America

Since 2000, trade between Turkey and Latin America has grown by 450 percent, surging from $1 billion in 2002 to $14 billion by 2024.

Over the past two decades, Turkey has significantly deepened its economic engagement with LAC, a market of 650 million people, driven by a “multi-dimensional foreign policy” approach. Through economic diplomacy, Turkey has effectively leveraged trade expansion strategies and agreements to strengthen its commercial ties. Since 2000, trade between Turkey and Latin America has grown by 450 percent, surging from $1 billion in 2002 to $14 billion by 2024, with Brazil, Mexico, and Colombia emerging as key partners.

Turkey has also pursued free trade agreements (FTAs) to reduce barriers and expand market access. It secured an FTA with Chile in 2011, while negotiations with Ecuador, Colombia, Mexico, and Peru remain ongoing. Additionally, Joint Economic Commissions and business councils, such as the Turkey-Brazil High-Level Cooperation Commission, facilitate sectoral collaborations in energy, mining, and infrastructure.

Beyond trade, Turkey’s economic engagement has also extended into the realm of investment, with its investments in LAC growing significantly. The 2014 Turkey-Colombia investment agreement, and projects like ANEX Tourism Group’s $1.8 billion hotel investment in Punta Cana, highlight this trend. Whereas, until the mid-2000s, KordSa (a subsidiary of Sabanci Holding) was the only Turkish company investing in the region, today over 20 Turkish companies are active, primarily in the automotive, mining, and transportation sectors. Notable projects include Yıldırım Holding’s $1.6 billion investment in port construction in El Salvador and Karpowership’s floating power plants in Cuba and Brazil.

Supporting this broader engagement, Turkish Airlines has significantly expanded its regional connectivity across LAC. The airline currently operates flights to São Paulo (GRU) and Rio de Janeiro (GIG) in Brazil; Buenos Aires (EZE) in Argentina; Mexico City (MEX) and Cancún (CUN) in Mexico; Bogotá (BOG) in Colombia; Panama City (PTY) in Panama; Caracas (CCS) in Venezuela; and Santiago (SCL) in Chile. The planned addition of Lima as its tenth destination in the region represents a further deepening of this network, strengthening connectivity with the Andean subregion and amplifying opportunities for trade, tourism, and business mobility, while reinforcing Turkey’s economic integration with LAC.

From Ankara to Latin America: Case Studies of Successful Economic Partnerships

Turkey has diversified its trade partnerships, engaging with countries of all sizes from Brazil to Suriname. 

It is also worth noting that Turkey has diversified its trade partnerships, engaging with countries of all sizes from Brazil to Suriname. This flexible approach demonstrates how third-party countries can expand their regional presence by tailoring strategies to different national profiles. To illustrate this, a selection of countries with varying population sizes has been made: Brazil, as a large country; Argentina, as a medium-sized state; Uruguay, as a smaller state; and Suriname, as a very small state.

• Brazil: In 2023, Turkey exported $992 million, including carbonates and motor vehicle parts, while Brazil exported $3.52 billion, led by soybeans and iron ore.
• Turkey’s exports to Brazil have increased at an annualized rate of 9.5%, from $629 million in 2018 to $992 million in 2023.

• Argentina: In 2023, Turkey exported $280 million to Argentina, including refined hydrocarbons and motor vehicles, while Argentina exported $585 million to Turkey, led by soybeans and dried legumes.
• Turkey’s exports to Argentina have increased at an annualized rate of 2.4%, from $249 million in 2018 to $280 million in 2023.
• Uruguay: In 2023, Turkey exported $181 million to Uruguay, with key exports being motor vehicles, parts and accessories, while Uruguay exported $354 million led by sulphate chemical woodpulp and bovine products.
• Turkey’s exports to Uruguay grew rapidly, increasing at an annualized rate of 23.6% from $62.8. million in 2018 to $181 million in 2023. Key Turkish exports included motor vehicle parts ($36.1 million), vehicle bodies ($17.8 million), and petroleum coke ($5.07 million).
• Suriname: Although a considerably smaller economy, trade reached $18.2 million in 2019, reflecting Turkey’s desire to engage with every economy in the region.

Atlantic Ambitions: Turkey’s Political Expansion in Latin America

Between 2015 and 2020, the Turkish President visited Latin America more frequently than all of his predecessors put together.

Meaningful political and economic cooperation has gained momentum during the AKP era. Particularly between 2002 and 2016, Turkey adopted a strategy of deeper regional integration characterized by:

• Trade agreements: Turkey has signed FTAs with inter alia Chile, and is actively working towards FTAs with Colombia, Ecuador, Mexico, and Peru.

• Diplomatic expansion: In Latin America, Turkey initially maintained embassies only in Chile, Brazil, Mexico, Argentina, Cuba, and Venezuela. Beginning in 2010, Ankara expanded its diplomatic presence with embassies in Colombia and Peru, followed by the opening of the Turkish Embassy in Ecuador in 2012. Between 2013 and 2014, new missions were established in the Dominican Republic, Panama, Costa Rica, and Guatemala. A further wave in 2018 included Trinidad and Tobago, Bolivia, Uruguay, and Paraguay, plus the opening of the embassy in El Salvador in 2022. Including the newly established (November 2025) embassy in Managua, Nicaragua, Turkey’s diplomatic footprint now extends to twenty missions. Overall, Turkey’s network of embassies in LAC grew from six in 2009 to twenty little more than a decade later, signalling a strong and sustained commitment to deepening political and diplomatic ties in the region.
• High-level visits: Turkey has also intensified its high-level diplomatic activity. Between 2015 and 2020, the Turkish President visited Latin America more frequently than all of his predecessors put together. This expansion of political dialogue was bolstered by reciprocal visits, beginning with Costa Rican President Óscar Arias’s 2009 trip to Turkey and followed by Turkish Foreign Minister Ahmet Davutoğlu’s 2014 visit to the Dominican Republic, where he signed cooperation agreements and described the country as a “star player” and “regional base” for Turkish businesses. Turkey also extended its diplomatic reach beyond major regional actors by cultivating ties with smaller states such as St. Vincent and the Grenadines, and made symbolic inroads with President Erdoğan’s 2015 visit to Cuba, which reflected its deliberately inclusive regional approach.

Importantly, this diplomatic engagement has often met with a positive response. In 2022, El Salvador’s President Nayib Bukele chose Turkey for his first official overseas visit, declaring that “El Salvador wants to be part of Türkiye’s growth”. This move highlighted the strategic importance he places on the two states’ collaboration. While Bukele’s Palestinian ancestry and his father’s conversion to Islam may be reasons for his sympathetic stance towards Turkey, there are more than personal links. Driven by shared priorities of development, autonomy, and diversified international alignments, the relationship reflects Turkey’s broader shift toward a multipolar diplomatic strategy.

Multilateral engagement: Turkey has expanded its presence in LAC by deepening its involvement in a broad range of regional and multilateral frameworks. This engagement includes obtaining observer status in key political and economic organizations such as the Organization of American States (OAS), the Association of Caribbean States (ACS), the Pacific Alliance, the Central American Integration System (SICA), and the Latin American Parliament (PARLATINO), as well as participating in the Ibero-American Summit. In addition, Turkey is a member of UN-affiliated regional bodies, notably the UN Economic Commission for Latin America and the Caribbean (ECLAC), and has established institutional relations with the Organization of Eastern Caribbean States (OECS). Beyond these formal arrangements, Turkey actively engages with several parliamentary and consultative platforms, including the Central American Parliament (PARLACEN), the MERCOSUR Parliament (PARLASUR), the Parliamentary Confederation of the Americas (COPA), the Forum of Presidents of Legislative Bodies of Central America and the Caribbean (FOPREL), and Parliamentarians for the Americas (ParlAmericas), enhancing its diplomatic influence thereby and fostering political alliances across the region. Institutionally, too, Turkey has signalled its commitment by establishing a dedicated LAC Directorate within the Foreign Economic Relations Board (Dış Ekonomik İlişkiler Kurulu-DEİK), decoupling its operations from the North American division to create a standalone regional focus. This move acknowledged Turkey’s special cultural and strategic interest and promises more focused engagement with LAC. 

The Turkish Touch: Cultural and Humanitarian Diplomacy

…cultural impact is also evident in the popularity of “the Turkish name “Elif”, which became one of the most common names for newborns in Chile in 2016, surpassing traditional names such as Loreto and Veronica.

At the same time, Turkey’s engagement in LAC extends beyond trade and diplomacy into the realm of soft power, encompassing mass media, humanitarian aid, religion, and education.

Firstly, Turkish TV series have emerged as a key cultural diplomacy tool. For example, in Chile, “the Turkish series 1,001 Nights was the most-viewed program in 2014”, contributing to a 70% increase in tourists, particularly from Argentina and Brazil, with numbers reaching 165,000 by August 2018. The series’ cultural impact is also evident in the popularity of “the Turkish name “Elif”, which became one of the most common names for newborns in Chile in 2016, surpassing traditional names such as Loreto and Veronica”. Moreover, media expansion serves to reinforce this cultural influence. Notably, the TRT External Services Department launched TRT Español and TRT Português, while Anadolu Agency opened an office in Bogota.

Humanitarian diplomacy is another cornerstone of Turkey’s soft power. Through TİKA (Turkish Cooperation and Coordination Agency), Turkey integrates long-term development into disaster relief, implementing over 400 projects across education, healthcare, agriculture, and infrastructure by 2022, with programme offices in Mexico and Colombia. 

Humanitarian diplomacy is another cornerstone of Turkey’s soft power. Through TİKA (Turkish Cooperation and Coordination Agency), Turkey integrates long-term development into disaster relief, implementing over 400 projects across education, healthcare, agriculture, and infrastructure by 2022, with programme offices in Mexico and Colombia. Turkey’s development aid reached 0.95% of its Gross National Income (GNI) in 2021, surpassing the UN target of 0.7% and placing the nation second in the global rankings. This strategy underscores that humanitarian assistance cannot only coexist with diplomatic efforts; it can also strengthen them. Just as individuals appreciate support in times of crisis, so states respond positively to meaningful aid, which fosters both trust and deeper cooperation.

Third, Turkey leverages cultural and religious diplomacy. It has pursued a “build a mosque first” strategy with a view to fostering closer ties with Muslim communities in LAC and positioning itself as a protector of the Islamic world; for instance, it has proposed the construction of a mosque in Cuba. Fourthly, soft power initiatives have touched on the educational realm. Specifically, Turkey has promoted initiatives including scholarship programs and bilateral educational agreements, including those it has signed with Nicaragua. These initiatives have produced measurable outcomes, with 625 students from the region supported to date, including 294 who are currently studying in Turkey.

A Contested Space: Turkey’s Challenges and limits in Latin America

…competition from other powers aiming to strengthen their influence in the region, particularly China, the European Union, and the United States, which considers LAC part of its vital space. 

Alongside its growing engagement in LAC, Turkey has faced competition from other powers aiming to strengthen their influence in the region, particularly China, the European Union, and the United States, which considers LAC part of its vital space. Αs shown in Table 1, the steady influx of Foreign Direct Investment (FDI) into the region highlights China as a particularly strong competitor. Two-way trade between China and the CELAC bloc stood at $515 billion in 2024, according to Chinese customs data, up from $450 billion in 2023 and just $12 billion in 2000.

Second, the EU, after limited success with interregional agreements in the 1990s, has refocused through the Global Gateway initiative and pledged €45 billion in investments through 2027, with a focus on strategic sectors—such as digitalization, climate and energy, transport, health, education, and research (Table 4)—that match the key concerns of LAC citizens (Table 2). Furthermore, it is leveraging its reputation as a “best partner”, particularly in environmental policies and the reduction of social inequality (Table 3). Last but not least, the United States remains a dominant player, with $567 billion in goods traded in the first half of 2023 coupled with a 38% of regional FDI, largely concentrated in Brazil and Mexico.

Furthermore, the EU-MERCOSUR trade agreement, which was finally signed in January 2026 after more than 25 years of negotiations, represents a recent milestone in the EU’s growing influence. This comprehensive agreement creates one of the world’s largest free trade areas, covering industrial goods, agriculture, and services. While Turkey is not party to the EU-MERCOSUR agreement, it is affected indirectly through its customs union with the EU, which requires the alignment of external tariffs for industrial products. Hence, the tariff reductions on industrial goods traded between the EU and MERCOSUR countries also apply to Turkey, providing indirect benefits for Turkish exports of machinery, chemicals, and transport equipment. However, agricultural products and services remain outside the customs union, limiting Turkey’s ability to capture benefits in these sectors without separate bilateral negotiations. The agreement also strengthens EU agricultural exports through tariff-rate quotas for sensitive products such as beef, poultry, and sugar, while safeguarding domestic European markets from sudden import surges. 

Ambition Meets Reality: The Limits of Turkey’s Reach in Latin America and the Caribbean

Turkey’s interactions with LAC can be viewed in the context of an increasingly multipolar world, in which emerging powers compete for influence and diversify their alliances. Despite Ankara’s wild ambitions, its capacity in the region faces structural constraints. Turkey’s economy is facing several serious problems which limit its ability to sustain large and ambitious diplomatic and military projects. Geographically, the distance to LAC creates logistical challenges: trade requires long shipping routes, military cooperation is costly, and consistent diplomatic follow-up hard.

Turkey frequently resembles Tolkien’s Barad-dûr, the Black Tower of Sauron, which has a powerful but single and overextended eye that can project an intense focus, but only on one major theatre at a time.

Politically, Turkey faces a heavy agenda, which includes having to manage complex issues in the Eastern Mediterranean, the Middle East, and the Caucasus, while simultaneously navigating its relations with the EU and Russia—all of which demand constant attention and resources. In this regard, Turkey frequently resembles Tolkien’s Barad-dûr, the Black Tower of Sauron, which has a powerful but single and overextended eye that can project an intense focus, but only on one major theatre at a time. However, LAC demands consistent focus, not sporadic visibility.

Turkey’s governance model is another challenge It is assertive, personalized, and at times confrontational. As a result, it may work well with political figures like Bukele and Maduro. but appeal less to governments that value autonomy and democratic norms. Regardless of its two decades of political engagement, Turkey lacks deep historical, linguistic, or religious ties with LAC, and long-term investment is going to be required if Ankara is to continue growing its influence.

Soft power, a key tool for Turkey globally, faces limitations in LAC. Unlike in sub-Saharan Africa (South Africa, Uganda, Ethiopia etc) or the Middle East, where mosque-building and its role as “protector of Islam” enhance influence, Muslims in LAC constitute only 0.1% of the population. The effect of TV series is significant, but cannot be lasting unless more work is done. Lasting impact depends on meaningful engagement, such as humanitarian projects, development, education, and capacity-building projects,—e.g. the project in Suriname building irrigation system capacity.

To remain influential and surpass these limitations, Ankara must act steadily, track public perceptions on global issues in LAC.

To remain influential and surpass these limitations, Ankara must act steadily, track public perceptions on global issues in LAC (Table 2), and engage both major (Brazil, Argentina etc.) and smaller powers in order to secure a place for Turkey among the Perceived Best International Partners for Cooperation in Key Policy Areas (Table 3).

Taken together, these constraints show that Turkey’s ambitions in LAC face clear limitations, stemming from economic volatility, geographic distance, diplomatic overstretch, and weak cultural roots. But is it all doom and gloom? 

Table 1: Distribution of Foreign Direct Investment Inflows into Latin America and the Caribbean (11 Countries), by Origin, 2015–2023

 

Table 2: Public Perceptions of Global Problems in Latin America, by Priority (%)

Source: Latinobarómetro and Friedrich Ebert Foundation, “What Are Latin America’s Perceptions on the European Union?” (Survey, 2021), 7, data.nuso.org.

Table 3: Perceived Best International Partners for Cooperation in Key Policy Areas, by Public Opinion (%)

Source: Latinobarómetro and Friedrich Ebert Foundation, “What Are Latin America’s Perceptions on the European Union?” (Survey, 2021), 34, data.nuso.org.

Table 4: EU-Latin America and Caribbean Investment Agenda under Global Gateway

Source: “Source: European Commission, “EU-Latin America – Global Gateway projects examples”, Infographics, July 2023, Eurostat/GISCO, accessed February 23, 2025.”

 

Turkey’s Playbook: Is it Working?

What is Turkey seeking to achieve in LAC, and to what extent is it succeeding? More importantly, can Turkey’s initiatives enable it to assert influence and punch above its weight in a region increasingly dominated by larger geopolitical actors?

If Turkey is measured against its own past engagement, then the answer is positive. The numbers state this loud and clear.

The answer depends on the benchmark. If Turkey is measured against its own past engagement, then the answer is positive. The numbers state this loud and clear: under its Latin America and Caribbean Action Plan, Türkiye has tripled its diplomatic presence, while bilateral trade has surged fifteenfold. By these metrics, the playbook is working. However, when Turkey is compared to major competitors such as China, the United States, and the European Union, the picture is somewhat different. To assess whether Turkey’s playbook is working in these terms, it is first necessary to examine the concrete gains it has achieved in the region. These gains can be broadly grouped into three interrelated dimensions: the economic, the political, and the cultural.

Turkey’s diplomatic missions in LAC function as symbols of presence, but also as active hubs of economic diplomacy which facilitate high-level meetings, business delegations, and investment coordination.

Embassies are both politically and economically beneficial. Turkey’s diplomatic missions in LAC function as symbols of presence, but also as active hubs of economic diplomacy which facilitate high-level meetings, business delegations, and investment coordination. For instance, in El Salvador, embassy-supported engagements between Turkish firms, DEİK, and local authorities have helped generate memoranda of understanding that have advanced major projects, including the $1.6 billion port expansion by Yilport Holding, as well as facilitating the exploration of trade and investment prospects across multiple sectors. Similar embassy-backed business dialogues in Cuba have strengthened private trade contacts.

Politically, Turkey’s engagement in regional institutions such as CARICOM, MERCOSUR, the OAS, and CELAC has elevated its international profile and generated tangible gains, including robust LAC support for Turkey’s non-permanent seats on the UN Security Council in 2009–2010 and 2015–2016. This institutional visibility has also helped Ankara build regional backing for key foreign policy priorities, particularly the Palestinian cause. In 2019, President Erdoğan publicly thanked Bolivian President Evo Morales, stating “I thank Bolivia for its support of the Palestinian cause, particularly with regard to the status of Jerusalem and the protection of Palestinian civilians.” This alignment intensified after the 7 October 2023 Hamas attacks and subsequent Israeli reprisals, when countries such as Belize, Chile, Colombia, Honduras and Bolivia opted to adopt positions sharply critical of Israel, with Colombian President Gustavo Petro explicitly describing the situation as a “genocide”.

Turkey’s rhetoric and its foreign policy choices have positioned it as an alternative pole vis-à-vis the West, and especially the United States.

A further gain stemming from Turkey’s regional playbook lies in political recognition. By treating smaller and medium-sized Latin American states as meaningful partners, Ankara, a G20 country, enhances these states’ visibility; this reinforces their notion of being heard, while forging positive perceptions of Turkey as a respectful and accessible partner. At the same time, both Turkey’s rhetoric and its foreign policy choices have positioned it as an alternative pole vis-à-vis the West, and especially the United States. Several LAC governments view Ankara as a sympathetic actor in multilateral forums, especially vis-à-vis sanctions and external pressure. Turkey has consistently opposed such measures, rejecting sanctions against Nicaragua in 2021 and criticizing the U.S. embargo on Cuba. This stance reinforces perceptions of Turkey as a more understanding and solidaristic partner than larger powers, providing Turkey with domestic gains as it is perceived as the protector of the “weak”.

Socially, Turkey has built a favourable image in LAC through the popularity of its television series, which offer narratives and values distinct from Western models and have indirectly boosted tourism. Furthermore, by providing aid and development assistance, it not only improves local living conditions but also generates diplomatic and reputational capital at relatively low cost. Furthermore, by promoting the idea of Turkey as the global protector of Islam and attempting to bring Muslim communities in the region within its sphere of influence, Turkey gains additional domestic legitimacy while countering competition from other Muslim-majority countries pursuing similar agendas.

But can Turkey truly punch above its weight? The short answer is: not yet. It can rival neither China’s massive economic investment in the region, nor the United States entrenched political and economic influence, nor the European Union’s combination of financial resources and normative power. So, the key question is not simply what Ankara has achieved but how a middle power like Turkey is to stand out in LAC amidst giants like China, the US, and the EU. Turkey’s playbook, smart diplomacy, targeted economic initiatives and niche soft power provides some answers, but there are limits on what they can achieve. By studying these successes and constraints, other states can also craft tailored strategies to engage the region more effectively.

Conclusion 

Turkey’s engagement with LAC exemplifies how a middle power can expand its influence in a distant, multipolar region through a combination of economic diplomacy, political outreach, and cultural soft power. Over the past two decades, Ankara has achieved impressive results: trade has grown exponentially, diplomatic representation has multiplied, and cultural initiatives, from television series to humanitarian programmes, have cultivated visibility and goodwill. Turkey has effectively demonstrated that strategic, tailored engagement can yield tangible benefits even from afar. Its successes often rely on niche strategies, such as prioritizing smaller states, leveraging humanitarian aid, or promoting an “anti-imperialist” discourse as a protector of the weak.

Yet Turkey also illustrates the limits of ambition: geographic distance, economic volatility, and competition from global giants constrain its capacity to dominate. For third-party countries, Turkey’s playbook offers dual insights: first, it illustrates the importance of tailored strategies; and second, it demonstrates that influence is built over time through consistent engagement, an institutional presence, and the cultivation of trust-based relationships, rather than through short-term projects or opportunistic diplomacy.

Ultimately, Turkey’s experience reveals deeper lessons about contemporary global engagement based on state capacity. While it is difficult to compete with the superpowers in the arena, middle and smaller powers can still carve out meaningful influence for themselves through a combination of economic pragmatism, cultural resonance, and diplomatic creativity. With its diverse states, developmental needs, and desire for balanced partnerships, Latin America presents fertile ground for such strategies. But success demands patience, sustained investment, and the humility to recognize limits while leveraging unique advantages. In the 21st-century multipolar arena, Turkey’s journey offers a blueprint not just for expanding influence, but for doing so in a way that is adaptable, resilient, and strategically coherent. As the father of soft power Joseph Nye once said: “Power does not lie in brute strength, but in the ability to shape the preferences of others.”

ELIAMEP held the event “Climate Resilience in Islands Regions and Local Government” on 20 January 2026, at the Hellenic American Union, within the framework of the European project Pathways2Resilience (SMILE). More than 20 speakers from the scientific community, policymaking bodies, municipal authorities, and social partners participated, aiming to strengthen public dialogue on climate change in island areas and the role of Local Government in addressing it.

The discussion focused on the conceptual foundations of climate resilience and their interpretation through the lens of the specific characteristics of insularity. Small scale, geographic isolation, intense tourism pressure, uncontrolled construction, depletion of natural resources, and the lack of critical infrastructure render islands more exposed to climate risks and limit their adaptive capacity.

Particular emphasis was placed on the crucial role of local authorities, which manage key policy areas directly linked to climate resilience, such as flood risk management, infrastructure maintenance, prevention of environmental degradation, and response to extreme events. At the same time, it was highlighted that municipalities’ proximity to local communities and the experiential knowledge they possess can strengthen adaptation planning, risk assessment, and the legitimacy of interventions.

A significant part of the discussion was devoted to whether the existing institutional, administrative, and financial framework enables Local Government to effectively perform this role, particularly in island areas. Despite the transfer of critical competences, the lack of adequate resources, technical support, and administrative capacity-building remains a major obstacle.

The event highlighted as a central conclusion that prevention and the strengthening of resilience in island communities require a holistic approach and cooperation among the scientific community, local authorities, institutions, and citizens. In an environment of an intensifying climate crisis, timely action is a critical factor in limiting impacts and enhancing the resilience of islands.

Many of these issues are also addressed in the ELIAMEP policy paper entitled “Climate Resilience in Island Regions and Local Government”, authored by Othon Kaminiaris, Expert on Environment and Climate Change at the Ministry of Foreign Affairs; Research Associate, ELIAMEP, and Artemis Androni, International Development Advisor.

The full text of the paper is available here, and its executive summary is available here (in Greek).

 

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

Following the conclusion of the World Economic Forum in Davos, ELIAMEP’s experts share their views on the strategic trends highlighted in global geopolitics and assess their implications for transatlantic cooperation.

The analysis is available in Greek.

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.

Read here in pdf the Policy paper by George Dikaios, Marie Curie Fellow, Leiden University; Senior Research Fellow, ELIAMEP and Marianna Terezaki, Junior Research Fellow, ELIAMEP.

Greenland is emerging as a critical point in global geopolitics, raising urgent questions: Are European countries ready to navigate a potential crisis in Euro-Atlantic relations?

ELIAMEP experts explore the strategic challenges and opportunities this situation presents.

The analysis is available only in Greek.