In 2007 two Russian mini-subs, Mir-1 and Mir-2, dived over 4,000 metres below the Arctic Circle to plant a titanium Russian flag, and so launched a primitive claim to the geological treasures at the top of the world. In highly Bond-esque fashion, the subs were supported by Mi-8 helicopters and the Rossiya, Russia’s most powerful nuclear-powered icebreaker.

The exploit was criticized by the then Canadian foreign minister as ‘15^th century’ buccaneering but won the three Russian expedition leaders the medal of ‘Hero of the Russian Federation’ (they were accompanied by a Swedish scientist and an Australian adventurer).

The episode highlighted how the scramble for rare places (we wrote about this in 2021) – the Arctic, Antarctic and outer space, are becoming strategic theatres in a world of great power rivalry. As much was emphasized in 2011 when then Secretary for State Hilary Clinton attended the Arctic Council meeting in Nuuk, a hitherto obscure club, to strengthen America’s commitment to the Arctic.

In that context, it is no surprise that the Trump administration has discovered the strategic importance of Greenland, although there is not a single mention of it in the recent National Security Strategy document. The White House might have asked nicely and had its way to place listening stations and missile batteries in Greenland, but instead the President has banalised his office and his country, and placed in jeopardy the most important geopolitical alliance of the past twenty years.

In doing so he has proven my ‘Rule of Unravelling’ which states that in the post globalization era, all of the constructive institutions and values of the globalized world will be stress-tested, in some cases to breaking point. For instance, the UN is invisible and impotent, and the most sacred of American institutions, the Federal Reserve, has come under a full-frontal attack in recent months. NATO it seems is next.

In most European capitals, especially those with large professional armies, there is considerable doubt that, under the Trump administration, the US will be a reliable ally. The immediate implication is to change the calculus that underpins any security guarantee for Ukraine, and indeed the process by which Ukraine will eventually become a member of the European Union.

Europe already significantly outstrips the US in terms of the extent to which it funds Ukraine (relative to GDP, Denmark is the biggest donor), but the intent of this aid will now have to become more lethal, in terms of what Ukraine can do with the arms provided to it, and craftier, in terms of the ways Ukraine can work with European armies to upset Russia’s war machine.

More broadly, there is also growing chatter that NATO is defunct, and will in effect be replaced by a European army (the Spanish foreign minister, amongst others, called for this last week).

A first step here might be an augmentation (and accelerated implementation) of the EU SAFE (Security Action for Europe) program that allows member states to borrow to fund military equipment for joint use, especially where the bulk of that equipment is made in the EU. Canada is a member of the SAFE, and stupidly the EC made it all but impossible for the UK to join. But, US arms manufacturers will have a hard time selling in Europe.

An EU army could very easily be put together around the structures of existing cooperation agreements, and of course, the structures that have been put in place by NATO. Yet, there is still a considerable amount of work to do however on optimizing collaboration in areas like cyber warfare, intelligence sharing and logistics infrastructure (the EU aims to create a ‘Military Schengen’ by 2027).

The aim of such an army would be the defence of European interests and territories, which in practice takes aim at Russia, but can be broadly interpreted to also cover counter-terrorism, space and the deep seas. In the context of the spat over Greenland, the composition of such an army could encompass elements that are not traditionally classed as military activities, such as economic war, but that in a total war world, might be part of the greater arsenal.

In Europe, the response to each crisis is to create a ‘Union’. In the same way that the euro-zone crisis led to the idea of Capital Markets Union, Europe’s ‘neo-con’ moment may produce a ‘Defence Union’, but unlike CMU, there is now a deadly sense of urgency. To my mind, it is still not at all clear that Europe’s political leaders are ready to command a large, capable military machine.

In a recent note ‘Year of the Riposte’ and in a talk at University College Cork with Prof. Andrew Cottey (‘Europe under Siege), I highlighted the litany of challenges that have been put to European leaders by the White House, China and Russia. In every case, the response has been a mixture of panic and a floundering search for compromise. Europe still dances to the tune set by Trump and others, as the Greenland fiasco has shown.

For example, in an underestimated speech at Davos, Friedrich Merz told the audience that ‘he gets it’ on defence and security. Yet, military procurement and recruitment are inefficient and sluggish.

Europe’s leaders have not yet passed the test set out in our recent ‘Riposte’ note ‘the litmus test for Europe in 2026 is to stop reacting to the disorder that others sow, but to build a positive narrative around the EU, and critically to riposte in a meaningful way against its adversaries’.

Soon they will have no choice, In 2019, Emmanuel Macron boldly stated that ‘NATO is brain dead’. It is now.

Have a great year ahead, Mike

It looks like I will have to burn all the Biggles books I collected as a child and jettison any antique copies of ‘Eagle’ comic books, because there are reports that Britain and Germany are about to sign a defence co-operation agreement, ending a long stretch of history where they have been on opposing sides. Indeed, the entire literature of what George Orwell described in his essay ‘Boys’ Weeklies’ could now be caught offside.

For instance, the work of John Buchan, once Governor General of Canada, and well known as the author of the ‘Thirty Nine Steps’, may be especially dislodged by an agreement that casts Germany and Britain as best geopolitical friends, as many of his books, like those of Captain W.E. John, depend on the role of the indispensable British hero seeing off his German nemesis. An innovation on the part of Buchan, was the glamorous female mastermind, Hilda von Einem, who vies with the handsome Irish intriguer Dominic Medina (please do read ‘Greenmantle’ and the ‘Three Hostages’) as the foil to Richard Hannay.  

One of the significant moments of history when Britain and Germany (Prussia then) found themselves on the same side was the Battle of Waterloo, one of the great contests, where during a pounding from French guns Wellington’s officers asked for orders he replied, ‘there are no orders, except to stand firm to the last man’.

One of the survivors was Henry Percy, aide de camp to Wellington, who after the Battle had to row halfway across the Channel with the news of the Duke’s victory, as an absence of wind had halted his sloop. On arriving in England he found that many (in the City) already knew of the victory owing, allegedly, to a network of agents assembled by Nathaniel Rothschild who is said to have made a fortune on the event and thereby spawned the phrase ‘buy on the sound of cannons’. It is a useful illustration of the roles of communications (social media today) and finance in war.

Indeed, part of the reason that Germany and Britain are moving closer together on defence (France is even closer to each one militarily) is finance. Gone are the days when London and Berlin could afford to spend 9% of GDP building great battleships in the lead-up to the First World War (Margaret MacMillan’s ‘The War That Ended Peace’ is worth a read), and now they must do with more meagre ambitions and newfound collaborations.

In this context, the recent NATO Summit was a watershed as it signalled a headline commitment to 5% defence spending across NATO countries (as a % of GDP), something that would have been unthinkable four years ago.

In Europe, there is a sense that some of the defence spending pledges amount to a ‘fudge’, and it is very clear that defence spending as a % of GDP does not translate into defence readiness. Of the European members of NATO, the UK, Greece, France, Poland, the Nordics and Baltics are the most defence ready, and some of them are already spending ambitiously. For example, Poland is set to reach a level of defence spending of 4% of GDP and has already struck a strategic military procurement partnership with South Korea.

On the other hand, countries like Italy and especially Spain have been castigated for their reluctance to spend. Italy has talked of including investment in a bridge from the mainland to Sicily as defence infrastructure and in the case of Spain, it has apparently tried to ‘kitchen sink’ other tangential forms of spending into the defence segment.

Still, the broad 5% target is a gamechanger, and is comprised of two parts – close to 3.5% on defence spending and then 1.5% on areas like cyber security and AI driven defence capabilities. Momentum will be boosted by the EU’s Eur 150 bn lending facility for defence procurement, up to Eur 3bn in loans from the EIB (European Investment Bank), and the German government’s significant augmentation of its defence budget. Still, this fiscal support leaves an enormous shortfall that will likely require capital from the private sector.

In this respect, we are at the cross-over of geopolitical forces. NATO as an operating construct has been thrown into doubt by Donald Trump and the actions of his defence policymakers (the latest act being to deprive Ukraine of defensive missiles). As such, Article 5 no longer seems as watertight as it did in the early 2000’s (it has only been invoked once, in September 2011, by Nick Burns, then US Ambassador to NATO). The impression many in Brussels have is that Europe will be left to defend itself from Russian aggression – there is now a parlour game amongst the various European intelligence agencies to estimate when a Russian incursion might occur.

As a result, the EU will become a much bigger player in defence procurement (see the recent White Paper here), Europe’s defence centric innovation economy will grow rapidly, and ‘war bonds’ will become a new asset for investors. Europe’s main threat is most obviously Russia, in addition to cyberwar from further afield. The danger in the long-term is that it finds itself as the last bastion of democracy, amidst a range of large, autocratic countries.

To return to Germany and Britain, anyone who reads the MacMillan books can’t escape the recognition that the arms race between Germany and Britain over one hundred years ago, is now being repeated by the US and China. Ultimately Europe may count itself lucky to stay out of this context.

Have a great week ahead,

Mike

A week ago I started reading Admiral Jim Stavridis and Elliott Akerman’s second book, ‘2054’, which like the first (‘2034’) is a work of fiction designed to tell us about how our own world is evolving and the risks that will confront us. Without spoiling the plot, ‘2054’ demonstrates how new technologies can be deployed in nefarious ways, with the goal of turning the tide of geopolitics. However, as much as I enjoy the work of the Stavridis/Akerman team, my reaction to ‘2054’ was much the same as ‘2034’ (‘2034 – are we already there?’), which is that it has been rendered out of date by bizarre events in the real, political world

The detonation of over seventy years of American diplomacy and soft power by the various speeches and deeds of the Trump administration is a fin de siècle moment, that has drawn comment across the diplomatic world (the most pertinent was that of the Singaporean defence minister who described how he saw the USA moving from a force for ‘moral legitimacy’ to a landlord seeking rent’).

The worry now is that the US will treat its allies like enemies and its foes like friends. There was much consternation in Europe, but as this note has argued so many times, very few European countries have faced up to the challenges of the post-globalized world (Mario Draghi’s speech to the EU parliament last week put it very well…’do something!’).

There is now a furore over Eur 500 bn defence bonds, joint nuclear shields and defence equipment shopping lists. But, a more urgent task than buying fighter jets is the need for Europe to have a coherent security strategy. In a weekend where many are anticipating the results of the German election, a neglected development was the collapse of government formation talks between Austria’s centre-right OVP and the far-right FPO.

Some weeks ago, the parties had agreed on an economic programme, but could not settle on  a common foreign policy, a critical stumbling point was oversight of the intelligence services (the OVP wanted to be in charge). This is a sensitive topic given that the FPO has a soft spot for the Kremlin, and specifically the fact that in 2018 the Herbert Kickl (FPO leader), when he was Austria’s interior minister, ordered an investigation into the country’s security services. Today, few of its EU peers share intelligence with Austria.

Reflecting that, the immediate challenge from Russia is infiltration, sabotage and manipulation across Europe (the Gerasimov doctrine and David Kilcullen’s work on Russian/Chinese tactics are both worth a read here ‘From Great War to Total War’). The EU has done relatively little to push back on this interference, and now has an urgent security (as well as defence) challenge.

This could take various forms.

The first is to penalise EU states that systematically go against the grain of the policies, values and interests of the Union. Hungary is the main offender here and whilst some EU funds have been withheld from Viktor Orban, the EU has in general failed to confront him. In the recent past there has been talk in the European parliament of excluding Hungary from the EU, which is technically difficult, but is a necessary part of a more ideologically consistent Europe, and one where bad actors face a penalty for their actions.

A second strand is to have much greater oversight over the movement of Russians in Europe, and of their capital. Vienna, Milan and the south of France, not to mention parts of Switzerland, are popular destinations for wealthy Russians and some European capitals are saturated with Russian money (Mark Hollingsworth’s book ‘Londongrad’ is instructive here as is Oliver Bullough’s ‘Butler to the World’). To emphasise the point, Russian interference in UK and lately Irish politics has not been aggressively countered, and my fear is that this is much worse in other countries like Germany.

Instead of clamouring to buy rocket launchers, Europe’s political classes have a lot to do domestically to shut the door on Russian interference in European affairs.

Then, on a more structural level, there is scope for much greater intelligence sharing across governments and joint task-forces on organised crime (gangs are a favourite extension of the Russian state). From the point of hardware, there is a need for increased joint use of satellites and electronic warfare collaboration.

The distinction between security and defence is an important and urgent one and a reminder of how complacent European governments have been. Whilst defence capabilities will take time to build up, the measures to be enacted in the security domain are less challenging to operationalise, but constitute a real test of European governments’ mettle.

Have a great week ahead,

Mike