Global Risk Indexes (20-02-2025)

Global 98 (0 —)
MENA 99 (+1 ▲)
APAC 98 ( —)
Europe 98 ( —)
Africa 98 ( —)
AMERs 97 (-1 ▼)
Markets 98 ( —)
Markus Schmidt, Europe region analyst at Worldwise Analytica

Markus Schmidt

Analyzing Today, Anticipating Tomorrow

Europe’s Strategic Marginalization Deepens as U.S.-Russia Talks Advance, Economic and Security Challenges Mount

The exclusion of Europe from U.S.-Russia talks marks a turning point in transatlantic security relations. The latest developments in Riyadh underscore a fundamental shift: Washington is now negotiating directly with Moscow, leaving both Ukraine and Europe on the sidelines. This raises profound questions about NATO’s strategic relevance, as Trump's administration appears willing to make decisions over European security without European input. French President Emmanuel Macron and British Prime Minister Keir Starmer are set to visit Washington in an attempt to salvage European involvement, but the damage is already done—Trump’s White House has demonstrated that it sees Ukraine’s future as a bargaining chip in broader U.S.-Russia relations, with or without Europe.

Germany’s political and economic crisis is deepening, exacerbated by new revelations regarding the AfD’s foreign funding. Austrian authorities are investigating a €2.35 million donation to the far-right Alternative for Germany (AfD), allegedly laundered through an Austrian intermediary with suspected links to foreign actors. This raises concerns about external attempts to influence German politics ahead of the February 23 election, where the AfD is projected to make historic gains. Meanwhile, Germany’s industrial sector faces severe headwinds from Trump’s proposed tariffs, which threaten to further destabilize an economy already on the brink of recession. If AfD gains political power amid economic turmoil, it could challenge Berlin’s commitment to EU trade policies and NATO security objectives.

The U.S.-EU trade war is escalating into a broader economic confrontation. Trump’s proposed 25% tariff on European car imports has drawn condemnation from German industry leaders, who warn that such a move would devastate Europe’s already struggling auto sector. With European automakers facing stiff competition from China, a transatlantic trade conflict could push the EU into a prolonged economic slump. The European Commission is weighing countermeasures, but divisions remain over how aggressively to respond. The core issue is whether Europe can develop an independent economic strategy or remain reactive to U.S. policy shifts.

Denmark’s massive military buildup reflects growing European anxiety over NATO defense readiness. The Danish government has announced a dramatic increase in military spending, boosting its budget by $6.99 billion over the next two years to address critical shortcomings in missile defense, naval capabilities, and military infrastructure. This decision, which raises Denmark’s defense spending to 3.2% of GDP, is a direct response to Trump’s demands that European allies take greater responsibility for their own security. However, the broader challenge remains: Can Europe collectively enhance its military deterrence, or will fragmented defense policies continue to hinder its strategic autonomy?

Ukraine is resisting U.S. pressure for mineral concessions, highlighting tensions in the transatlantic alliance. Trump’s administration has pushed for Ukraine to grant the U.S. 50% of its critical mineral wealth—including lithium, uranium, and titanium—in exchange for continued American support. Ukrainian President Volodymyr Zelenskiy has rejected these terms, arguing that security guarantees must come first. This dispute reveals a fundamental shift in U.S. policy: rather than treating military aid as a strategic investment in European security, Trump views it as a transaction that must yield tangible economic returns for the U.S. The outcome of these negotiations will determine whether Ukraine remains aligned with Washington or seeks deeper economic ties with Europe.

Russia is intensifying hybrid warfare in Europe, with cyberattacks and disinformation campaigns targeting key EU states. Pro-Kremlin hacking groups have escalated cyberattacks on Italy’s financial sector, while Russian propaganda efforts in Germany are ramping up ahead of the upcoming elections. Moscow’s use of hybrid tactics aims to erode European unity and exploit divisions within the EU. Meanwhile, reports of Russian forces reclaiming lost territory in Ukraine signal that the battlefield situation remains precarious, adding pressure on European governments to provide additional military aid.

The EU’s 16th sanctions package against Russia is an attempt to tighten economic pressure, but its effectiveness is uncertain. The new measures target Russian aluminum imports, impose restrictions on gaming consoles and flight simulators that could aid Moscow’s drone warfare, and blacklist dozens of vessels involved in circumventing oil price caps. However, the gradual implementation of these sanctions raises doubts about their immediate impact. With Russia adapting to Western economic restrictions through alternative trade routes, Europe faces an uphill battle in enforcing meaningful economic deterrence.

As Europe confronts an increasingly uncertain geopolitical landscape, its ability to assert strategic autonomy, counter economic pressures, and reinforce its security framework will define its future trajectory.

Geopolitical Risk Assessment for the Europe
(20-02-2025)

Europe faces escalating instability as U.S.-Russia negotiations continue without European input, sparking fears of a deal that undermines Ukraine and NATO's strategic posture. Economic uncertainty is rising due to Trump's escalating trade war, which threatens European manufacturing, while energy security risks are heightened by Russian hybrid warfare. Meanwhile, a massive military buildup in Denmark highlights broader NATO concerns over European defense readiness, and political tensions in Germany deepen with growing scrutiny over AfD’s foreign funding. As Ukraine pushes back against U.S. demands for mineral concessions, the continent is being forced to reconsider its strategic autonomy, economic resilience, and security framework in response to shifting U.S. policies.

Geopolitical Risk Index

Developments to Follow for the Europe (See All Global)

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