17 February 2025

Paris talks, but only the UK acts. While EU leaders debate Ukraine’s defence in Paris, the UK is the first to commit troops. With German elections around the corner and France offering ideas instead of action, Poland is waiting on more than words – Munich. Never again.

EU looks to boost defence spending amid greater US pressure and Russian war footing – as well as start of 2028 budget negotiations

GLOBAL/REGIONAL

European Commission (EC) President Ursula von der Leyen has proposed loosening spending rules so that member countries can make bigger investments in defence.
More specifically, Von der Leyen intends to initiate the EU-wide Stability and Growth Pact’s escape clause, meaning that defence spending could be exempt from limits on countries’ budget deficits and their debt-to-GDP ratio.
European officials are also reportedly working on a major new package to ramp up support for Ukraine – but all these spending plans won’t be announced until after the German election on 23 February to avoid stirring up controversy before the vote.

This investment push comes as military spending in Russia now outstrips all of Europe‘s defence budgets combined, according to a study by the International Institute for Strategic Studies.
Total Russian defence spending soared last year by 42% in real terms to Rbs13.1 trillion – equivalent to $462bn on the basis of purchasing power parity. European defence budgets by comparison, including the UK and EU member states, rose almost 12% last year to $457bn.

China is helping Russia’s military drone production by becoming a hub for the smuggling of critical Western components for Moscow’s armed forces, Estonia’s foreign intelligence said in its annual national security report last week.
Some 80% of such components reaching Russia now come from China – an increase on previous Ukrainian reports which suggested that roughly 60% of foreign parts found in Russian weapons on the battlefield in Ukraine have come via China.

EU defence investment also comes amid growing pressure from Donald Trump‘s new US administration. The new President has long called on Europe to up its military spending, but Trump upped the ante last week by saying he would impose 25% duties on imports of steel and aluminium from all countries.
One option would be for Brussels to reimpose tariffs on the US, but Reuters reports that Washington pressured its allies at last week’s Munich Security Conference to instead buy more American weapons in exchange for no tariffs – something Polish PM Donald Tusk has long said the EU should do.
How to prepare for future threats of tariffs on Central Europe is of key importance. An in-depth analysis of the impact of duties on steel and aluminium can be found in this Polish Economic Institute weekly report.

US VP JD Vance said that the biggest threat facing Europe comes ‘from within’, not from Russia and China, at the Munich Security Conference last week, accusing Europe of disregarding voters and enabling censorship of alternative views.
The comment appeared to refer to a longstanding agreement among Germany’s major political parties to refuse to work with the neo-Nazi Alternative for Germany (AfD), building on Elon Musk’s outspoken support for the party and plans to end the so-called cult of guilt around it.
Vance’s statements brought into question founding EU values, shocking those present in Munich. But the speech was also particularly ill-judged coming from an administration that is itself bringing down the rule of law. For example:

Trump has halted the enforcement of a 50-year-old anti-corruption law that allows the prosecution of Americans accused of bribing foreign officials.
The US President says this will bring more business for America, but anti-corruption watchdog Transparency International said the order ‘diminishes – and could pave the way for completely eliminating – the crown jewel in the US’s fight against global corruption.’

Over 2/3 of countries scored below 50/100 in Transparency International‘s latest Corruption Perceptions Index (CPI), with a global average of just 43.
The US ranked 28th globally and scored 65/100, but this reflected a major drop in score by 4 points from 2023-2024.
Hungary was again the lowest scoring in the EU, ranked 82nd globally and scored 41/100 (-1). Poland ranked 53rd and scored 53/100 (also -1).
Transparency International singled out Slovakia as a country to watch, however, because it dropped by 5 points to score 49/100 and rank 59th globally. Notably, Czechia also dropped by a point to score 56/100 and rank 46th globally – reflecting the failure of the ruling Czech government’s anti-corruption initiative.

Trump also said last week that he would love to have Russia return to the Group of Seven nations, arguing it was a mistake for Moscow to be expelled.
‘I’d love to have them back. I think it was a mistake to throw them out. Look, it’s not a question of liking Russia or not liking Russia. It was the G8’.

Google has cooperated with autocratic regimes around the world, including the Kremlin in Russia and the Chinese Communist Party, to facilitate censorship requests, an Observer investigation has revealed.

In contrast, the FT has seen a Russian government presentation which indicates Moscow is concerned that Western pressure, including via sanctions, is hampering its ability to draw former Soviet nations closer into its orbit and build ties with the Global South. The report was apparently shown at a strategy session led by Russian PM Mikhail Mishustin last April.

European commissioners have rubber-stamped a 14-page document laying out the major issues that need to be addressed in the EU‘s next seven-year budget.
As part of the framework, Brussels wants to replace dozens of ‘rigid’ programmes with three merged funds that would hand more spending power to capitals. It has also launched public consultations on policies the next budget should support, including:
- EU funding for cross-border education, training and solidarity, youth, media, culture, and creative sectors, values, and civil society;
- EU funding for civil protection, preparedness and response to crises.

Unsurprisingly, Fidesz MEPs have already hinted they would veto the new EU budget unless funds blocked because rule of law violations are released.
The new budget is bad news for the governing party given it aims to focus on supporting local authorities and cities directly enhancing regional development. The European Parliament (EP) will also send a new delegation to the country to assess the rule of law developments in April.

The EC work plan for the coming months of 2025 has also been published, including important plans with regards to cutting off from Russian energy, the Clean Industrial Deal, Cheap Energy, revision of climate law among and more.

The European People’s Party (EPP) will not endorse the European Conservatives and Reformists’ (ECR) proposal to set up a parliamentary inquiry committee to investigate the Commission’s funding to green NGOs.

11 EU leaders have called on the EC to focus on supporting high-speed railways, Czech PM Petr Fiala said on X last week, explaining that ‘a better connected Europe is the key to prosperity and economic growth. EU financial support is crucial here and brings great added value.’
The letter was also signed by Slovak PM Robert Fico, Hungarian PM Viktor Orbán, Spanish PM Pedro Sánchez, and Italian PM Giorgia Meloni.

Friedrich Merz, Germany’s likely next chancellor, has reiterated that his government will work closely with Poland, France and Britain on strengthening military support for Ukraine if he is elected, voicing regret at the lack of joint strategic military responses over the last three years.
In an interview with The Economist, he also flagged plans to slash red tape and axe the benefits system, and said Germany has to build ‘at least 50 gas power plants’ with no return to Russian gas ‘for the time being’ – read the Polish section for some similarities in message with Tusk on de-regulation.
Current chancellor Olaf Scholz meanwhile extended Germany’s temporary border controls with EU member states, including Poland, by six months.
READ HERE: What does Central Europe expect from the next German government?

The EC will not commit to launching legal action against Poland after Tusk openly threatened to disregard the Migration Pact. The response stands in stark contrast with previous remarks from high-level officials.
‘The Pact will enter into application in mid-2026. Work is ongoing. The Commission is in close contact with all member states and supports, where necessary, to ensure that all member states are ready by then,’ a spokesperson said.
All member states will have ‘full discretion’ to choose among three solidarity measures but will never be ‘obliged’ to relocate asylum seekers if they do not want to, the Commission later clarified.

Austria is back to square one in its attempt to form a government after coalition talks collapsed between the far-right and the conservatives.
Herbert Kickl, leader of Austria’s pro-Russian Freedom Party, ended the process after more than a month of negotiations. Had he succeeded, he would have overseen the country’s first far-right-led government.

The Eurobarometer surveying attitudes and knowledge of science and technology among EU citizens has revealed worrying results in the V4.
Poland (52%), Czechia (51%), Hungary (51%) and Slovakia (51%) came top four in percentage of participants who agreed when asked whether ‘Climate change is for the most part caused by natural cycles rather than human activities’.
Slovakia came bottom (46%) in percentage of participants who agreed that ‘Human beings, as far as we know them today, developed from earlier species of animal’.
And Slovakia (58%) and Poland (54%) came top two in percentage of participants who strongly or tend to agree that ‘In your daily life, it is not important to know about science’.

Tusk joins EU leaders at emergency Ukraine summit in Paris today – as confusion reigns over Europe‘s role in Trump-Putin talks

UKRAINE

Polish PM Donald Tusk is set to join other European leaders in Paris today for an informal emergency summit about Russia’s war on Ukraine.
The gathering was called after it was revealed that Donald Trump had held a 90-minute phone call with Vladimir Putin on 12 February, during which the two agreed to initiate peace talks to end the war in Ukraine – sparking fears that Europe would be cut out of negotiations.
French President Emmanuel Macron will also host heads of government from Germany, the UK, Italy, Spain, the Netherlands and Denmark, as well as EC chief Ursula von der Leyen and NATO Secretary General Mark Rutte.
This follows a meeting of the Weimar+ FMs (Poland, France, Germany, Spain and Italy, as well as the UK and Ukraine) to discuss European security last week.

UK PM Sir Keir Starmer has said he is ‘ready and willing’ to put UK troops on the ground in Ukraine to help guarantee its security as part of a peace deal, explaining that this is a ‘once-in-a-generation moment’.
Macron has meanwhile put forward a new European military coalition as an alternative to NATO to help combat Russia and other threats: ‘We can’t rely on (the US) or rest of the world.’
This echoes Ukrainian President Volodymyr Zelenskyy’s calls for the creation of an ‘armed forces of Europe’, adding that his Ukrainian army is ‘not enough’.
Leaders like Zelenskyy and Starmer have nonetheless reiterated that US support will remain critical in securing lasting peace – but it remains to be seen in what capacity.

Czech FM Ján Lipovský summarised the atmosphere after the Munich Security Conference by saying there is ‘quite a lot of confusion‘ from the US regarding Europe and its role in peace talks around Ukraine.
Over the weekend, US Secretary of State Marco Rubio reassured leaders that both Kyiv and Europe will be involved if preliminary peace talks advance to ‘real negotiations’. Defence Secretary Pete Hegseth also said that negotiations will involve both Ukrainian and Russian presidents.
This contradicted US special envoy to Ukraine and Russia Keith Kellogg, however, who had claimed earlier that European countries, aside from the two warring nations, would most likely be consulted but ultimately excluded from negotiations.
This had compounded an already negative atmosphere, after Hegseth had said that a return to Ukraine’s pre-2014 borders was unrealistic and that the Trump administration does not see NATO membership for Kyiv as part of a solution.

In response, Ukrainian President Volodymyr Zelenskyy and EU leaders have warned the US against striking a peace deal with Russia ‘behind their backs.‘
Speaking ahead of a NATO DMs’ meeting in Brussels on 13 February, top diplomat Kaja Kallas said: ‘It is clear that any deal behind our backs will not work. Any agreement will need also Ukraine and Europe being part of it. Why are we giving [Russia] everything that they want even before the negotiations have been started?’
Zelenskyy said ‘We, as an independent country, simply will not be able to accept any agreements without us.’

Polish FM Radosław Sikorski called Trump’s decision to hold direct talks with Putin a ‘mistake’, warning him that failing to ensure a fair peace for Ukraine would undermine US credibility and embolden China in its ambitions to take Taiwan.
He also said it was a ‘slight pity’ that JD Vance did not lay out the US ‘strategic vision’ for security in the region, adding that ‘This is a security conference.’
Nonetheless, Sikorski said he was ‘relieved’ that the US had not announced cuts to its defence spending in Europe as media reports were predicting – and said the ‘strong signal’ from the Munich Security Conference was that Europe needs to start taking its own security seriously.

In contrast, Hungarian PM Viktor Orbán blamed the EU for being excluded from the conversation, posting that: ‘You can’t ask for a seat at the meeting table. You have to earn it! With force, good leadership and clever diplomacy’.
Slovak PM Robert Fico also criticised the EU for its military support of Ukraine and claimed that Russia had ‘serious security reasons’ for the invasion.
Drawing a sporting analogy, Fico likened the situation to a tennis match, suggesting that a Trump-Putin duo would defeat the EU-Ukraine pairing in straight sets: ‘The presidential pair will win convincingly: 3-0 (6:0, 6:0, 6:0).’

Aside from his call with Putin, Trump also reportedly held a call with Zelenskyy focused on potential peace frameworks, military technology, and US-Ukraine cooperation in advanced production, including drones.
Zelenskyy also met with US VP JD Vance on the sidelines of the Munich Security Conference, where Vance emphasised that further discussions between Kyiv and Washington will take place in the coming weeks and months.
US Treasury Secretary Scott Bessent also travelled to Kyiv for discussions on access to critical minerals, which Trump is eyeing in return for aiding Ukraine’s defence.

US and Russian officials will commence talks in the coming days aimed at ending the war in Ukraine, the Russian MFA has said. Marco Rubio and Sergei Lavrov will reportedly meet in order to set up a meeting between Trump and Putin.’

Zelenskyy confirmed that his country was not invited to talks in Saudi Arabia and that Kyiv would not engage with Russia before consulting with strategic partners.
However, Keith Kellogg will visit Ukraine to meet with government officials and civil society representatives this week. The trip will focus on discussing the next steps in US-Ukraine cooperation and future peace negotiations.

Ukraine and the European Investment Bank (EIB) have signed agreements to finance energy restoration and critical infrastructure projects.
€16.5 million will be allocated for critical infrastructure restoration and energy efficiency. A separate €100 million agreement will support water and heating infrastructure, education, healthcare and housing modernisation.

A Czech-led initiative to supply Ukraine with large-calibre ammunition has delivered 1.6 million shells and will continue, Czech President Petr Pavel said on 15 February – a year after he announced the drive to help Ukraine.

The National Security and Defence Council in Ukraine (NSDC) has imposed sanctions on former Ukrainian President Petro Poroshenko. The European People’s Party (EPP), the largest faction in the EP, expressed surprise and concern, viewing the sanctions as politically motivated.

On 14 February, a Russian drone carrying an explosive warhead struck the shelter of Reactor 4 at the Chernobyl Nuclear Power Plant. The fire was extinguished, and radiation levels remained stable, according to Zelenskyy.
Ukraine has called on the IAEA to take urgent measures to prevent future attacks on nuclear sites, while Kaja Kallas condemned the attack, calling it ‘reckless’ and further proof that Russia is not seeking peace.

The world‘s chemical weapons watchdog has once again found traces of tear gas on the frontline in Ukraine’s central-east Dnipropetrovsk region.
The use of riot control agents such as tear gas as a method of warfare is prohibited under the Chemical Weapons Convention, the non-proliferation treaty overseen by the Organisation for the Prohibition of Chemical Weapons (OPCW).

Slovak government reshuffle on the cards as Fico ultimatum expires today – and Musk’s meddling in V4 media continues

CZECHIA

The Chamber of Deputies voted to lift the immunity of Freedom and Democracy Party (SPD) leader Tomio Okamura, allowing police to proceed with criminal charges related to controversial election posters his party produced, depicting racial and social stereotypes. Okamura has condemned the move as political persecution.

Parliament again delayed a vote over government-backed legislation aimed at raising concession fees for public media, Czech Television (ČT) and Czech Radio (ČRo), amid continued obstructions from the ANO and SPD opposition parties.
The vote is now scheduled for 5 March and even if the legislation is eventually passed, which is still not certain, both ČT and ČRo will continue to face financial pressure before the legislation is implemented.
In December, ČT director Jan Souček described the budget ČT adopted for 2025 as an ‘Armageddon’ version, in which concession fees won’t be raised. ČT was already forced to scale down sports broadcasting last year, in turn boosting the country’s O2 sports entertainment channels and online platforms of the PPF Group.

PPF boosted its foothold in Serbia and the Western Balkans after it acquired Serbian Broadband (SBB) of the United Group last week. The €825 million deal is the first that PPF has carried out after joining forces with UAE telco e&, and will give the e& PPF Telecom Group more than 700,000 active customers in the country.

PPF’s busy week also included the acquisition of a stake in the Gasworx development project near the city centre in Tampa, Florida, which PPF Real Estate Holding CEO Robert Ševela described as ‘further expanding our portfolio into Western markets, with a special focus on the United States.’
PPF had extensive activities in the Russian market but scaled these down dramatically following the Russian full-scale invasion of Ukraine. Last November, PPF reached a deal to sell PPF Life Insurance, one of the largest insurance companies in Russia, to Dubai-based Inweasta of Russian investor Andrey Elinson.

Also last week, Elon Musk and US Presidential envoy Richard Genell called for the closure of the Prague-headquartered Radio Free Europe/Radio Liberty (RFE/RL), as well as the US international broadcaster Voice of America (VOA), describing the media as ‘a relic of the past’ and run by ‘left-wing radicals.’
RFE/RL began broadcasting in 1950 and was virtually the only source of free information in the Soviet sphere of influence during the Cold War era. It was declared an ‘undesirable organisation’ by Vladimir Putin’s regime and left Russia in March 2022 after it refused to comply with the Russian ‘foreign agents’ legislation.
RFE/RL reporters are now instrumental in covering Russian atrocities in occupied parts of Ukraine.

Czechs have the highest trust in nuclear energy out of all EU citizens at 77%, according to the Eurobarometer poll surveying attitudes and knowledge of science and technology among EU citizens.
This puts Czechia ahead of Finland (71%) and Poland (69%). Austrians registered the highest negative attitude towards nuclear energy at 67%, while negative attitudes prevail also among the majority in Germany and Greece.

Chief of General Staff Karel Řehka has called on Czechia to further expand its army’s capacity, warning last week that Russia will not become friendlier or more predictable even if the fighting in Ukraine ends.
Řehka questioned the feasibility of increasing the number of professional soldiers to 37,500, however, citing demographic trends and current recruitment levels. Instead, he suggested exploring alternative army models.
An updated army development strategy, expected to be approved this year, envisions growing the force to 37,500 – an increase of roughly 14,000 soldiers by 2035.
Czechia has the third-highest risk of cyber fraud globally, according to security firm Gen Digital, which owns Avast, AVG, and Norton. Dating scams are common, with both Czechia and Slovakia among the top ten countries at risk.
According to the report, social networks, particularly Facebook, remain major platforms for fraud. Facebook accounted for 56% of threats, followed by YouTube at 24%, X at 10%, and Reddit and Instagram at 3%. In messaging apps, Telegram faces six times more threats than WhatsApp due to its privacy features.

HUNGARY

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