• The US military intervention in Venezuela will have serious economic and political repercussions on Cuba.
• The fracturing of the strong links forged by Fidel Castro and Hugo Chávez could accelerate the demise of the Cuban regime.
• The crisis potentially precipitated by the Trump Administration’s oil policy could have more serious effects for Cuba than the fall of the Soviet Union.

Analysis

Introduction

Everything points to the US military intervention in Venezuela on 3 January 2026 being not an exception but a precedent and a warning to put pressure and threaten other governments, including that of Cuba, former President Nicolás Maduro’s main ally. Unlike his predecessors, Donald Trump does not distinguish between political regimes but between strong (China and Russia) and weak nations, which is how he views most of his neighbours to the south, now potential targets of his imperialistic zeal.

Starting at the turn of the century, Fidel Castro and Hugo Chávez sought an economic and political alliance that was given formal status in 2004 with the Bolivarian Alliance for the Peoples of Our America (Alianza Bolivariana para los Pueblos de Nuestra América, ALBA), led by both countries as an alternative to the Free Trade Area of the Americas (FTAA), which the US abandoned in 2005. The falling price of oil and the Venezuelan crisis led to the commercial value of these deals being reduced over the last 10 years. They continue being essential to the Cuban economy, however. US pressure on the Venezuelan regime could lead to the dismantling of its trade and financing arrangements with Cuba, though it is not yet possible to state with any certainty what will happen.

Cuba depends on the inflow of oil from Venezuela, Mexico and Russia. Now that the US has militarised the Caribbean sea lanes, controlling the passage of ships with threats of tariffs on actual and potential suppliers, less of the desperately needed oil is arriving. Even with the supplies that had been arriving there were blackouts lasting days at a time. Cuba lacks either the financial resources or the exporting strength to generate the currency needed to replace its purchases of Venezuelan oil on the international market; these supplies were arranged using specific agreements based on a political alliance, involving the export of medical and other professional services, an arrangement that is hard to replicate with other countries in the same quantities and financial conditions.

The loss of this inflow will aggravate the energy crisis and paralyse the greater part of transport, industry and services, entailing a significant contraction of Cuban GDP, greater inflationary pressures and an increase in the social cost of a crisis that has worsened over the last decade. The accumulation of economic and social tensions is intensifying because the Venezuela situation and the faltering supplies of fuel erode the possibility of managing the crisis while reducing the scope for governability.

Venezuela is home to the largest oil reserves in the world, one of the main justifications of Operation Absolute Resolve, but Cuba is devoid of strategic resources; nor is it a hub of the drug trafficking that blights the entire continent. How would Donald Trump justify a military attack on Cuba? Not with democracy, something to which he is indifferent. For the time being, Trump’s warnings that Cuba could be the next target are only preparing the ground for future negotiations, in line with his ‘life is a big deal’ slogan. The aim in what follows is to analyse the economic and political effects on Cuba of the change in government in Venezuela, which has left the US with greater leverage.

How much does the Cuban economy depend on its alliance with Venezuela?

Figure 1, using official data from the Cuban National Statistics and Information Office (ONEI), supplemented with the authors’ own estimates, gauges the importance of trade with Venezuela for the Cuban economy and enables an assessment to made of how this dependency has evolved over the last decade. The volume of trade in 2014, when bilateral relations reached their zenith, is compared to the most recent data available, relating to 2024.

Figure 1. Cuba: reduction of trade with Venezuela (US$ mn)

The figures show that economic exchanges between Cuba and Venezuela in 2014 were exceptionally large for the dimensions of the Cuban economy and its international trade. Exports of Cuban goods to Venezuela exceeded US$2 billion, including a lion’s share of medications and pharmaceutical products. Imports of goods from Venezuela came in at over US$5 billion, dominated by the supply of oil and oil-based products.

The deficit in the balance of trade on goods was offset by the largest component of trade: the export of services, which accounted for around US$7.1 billion and chiefly comprised so-called professional services, predominantly medical. Altogether, bilateral trade exceeded US$14 billion in 2014 and accounted for around 45% of Cuba’s total foreign trade, close to 20% of its GDP, something that indicates the strategic nature of relations with Venezuela.

The figures show a significant decline in trade from that point on. Particularly striking is the almost complete collapse in Cuban exports of goods to Venezuela, plummeting 99%, which suggests that this component of bilateral trade has been virtually obliterated. Secondly, imports of Venezuelan goods, linked essentially to oil, fell by 83%. The Reuters news agency and the estimates made by the academic Jorge Piñón agree in suggesting that these volumes fell from around 90,000-100,000 barrels of oil per day (bpd) in 2015 to a much lower range of 32,000-35,000 bpd in 2024 and 26,000-27,000 bpd in 2025. The decline in volumes, together with the fall in the price of crude, would account for the contraction in current US dollar prices of a fundamental trade component.

Exports of services, by contrast, show a greater relative resilience, with a fall of 33% in the period. This suggests that Cuba-Venezuelan relations shifted towards an arrangement that was increasingly concentrated on professional services, something that emphasised their political nature and the difficulty of replicating them in other markets. As a result, total trade fell by 60% in nominal terms. Its share of Cuba’s total foreign trade fell from 45% to 31% and its share of GDP fell from 20% to 9%. Venezuela continues to be an economic partner of the utmost importance for Cuba, however, which highlights the external vulnerability of the Cuban economy to any additional disruption to these flows.

The indicators set out in Figure 2 show how the reduction in trade with Venezuela has had its repercussions on Cuba’s macroeconomic performance over the course of the last decade. These indicators enable a strong correlation to be made between the decline in bilateral trade and the deterioration of the main macroeconomic aggregates.

Figure 2. The decline of Cuba’s macroeconomy over the last 10 years (US$ mn)

Figure 2 shows that Cuba’s GDP not only stopped growing but underwent a decline of close to 3% in the period, a performance marked by the collapse in economic activity from 2020. In parallel, there was a striking increase in inflation, owing in part to the monetisation of excessive fiscal deficits in a context of contracting output.

Internal imbalances have gone hand in hand with external ones. The figures point to a dramatic fall in exports, imports and total trade with the rest of the world. The 85% reduction in the trade balance is attributable to the fact that the Cuban economy has for several years been incapable of meeting its financial commitments to its creditors, foreign investors and international suppliers, prefiguring a situation of permanent financial default.

Another pertinent factor in Cuban macroeconomic dynamics and trade with Venezuela is the effect of sanctions, both on Venezuela and directly on Cuba. In the case of Venezuela, these were tightened in 2017 and, more decisively, in January 2019, when the US imposed sanctions on Petróleos de Venezuela S.A. (PDVSA), focusing the economic punishment on the oil industry and affecting the export capacity and arrangements to supply crude oil and fuels. In the case of Cuba, after a brief period of loosening during the Obama Administration, the sanctions were tightened under the first Trump Administration.

The Cuban economic crisis also reveals the failure of internal reforms. The transformations launched during the first government of Raúl Castro never went deep enough to have an impact on competitiveness, attract foreign investment in any sustained form or develop export sectors capable of offering viable alternatives to the alliance with Venezuela. In practice, the Cuban government insisted on trying to replicate the model of exporting professional services –mainly medical– to other countries.

Despite the growing participation of the Cuban private sector in internal and external commerce and in a range of service activities, it continues to face obstacles to its expansion (private companies can only employ a maximum of 100 workers). A large part of their currency and financial activities are conducted through informal channels owing to the national financial system’s crisis in currency liquidity. The majority of Cuban industries continue being monopolised by inefficient state enterprises and by an opaque business conglomerate (Grupo de Administración Empresarial S.A., GAESA) run by military institutions. All this translates into an accumulation of distortions that affect the productivity and competitiveness of business activity.

Cuba’s military-business machinery made a substantial commitment to tourism, devoting the larger part of its scarce financial resources to this end. Investment has focused almost exclusively on hotel construction, however, paying scant attention to other areas such as electricity and transport infrastructure, food production and the quality and stability of complementary services. Set against this backdrop, tourism has not managed to recover from the effects of the pandemic. Foreign tourist numbers fell by 20% in 2025 and the prospects for 2026 do not augur well. Nor has foreign investment served to cushion the Venezuelan shock. Sanctions and dwindling belief in the solvency and financial stability of the Cuban economic model, even among the Cuban regime’s international allies, has stalled the arrival of international capital.

The Soviet precedent and the risk of an amplified external shock

The possible obliteration of trade between Cuba and Venezuela and the abrupt cut in oil supplies are inevitably reminiscent of the way events unfolded in the 1990s, following the disappearance of the Soviet Union. The loss of its main economic ally was a severe blow to the Cuban economy at the time. A similar shock now would have highly adverse consequences, but with a fundamental difference: the initial economic, financial and institutional conditions are more unfavourable now than they were then.

At the end of the 1980s, Cuba’s infrastructure was less under-capitalised, with certain levels of financial reserves and inventory, and with a better stock of human capital. Moreover, the political leadership enjoyed greater internal cohesion and a degree of international recognition that is now non-existent. The economy would be obliged to confront the Venezuelan oil shock following several years of recession –in virtual free fall since 2020– and with profound imbalances in fiscal, monetary and external terms.

There is no public or verifiable information that would enable a reliable estimate to made of Cuba’s strategic oil reserves. The authorities do not release data about storage volumes. What is known, however, based on empirical evidence, is that operations are run on very tight margins. The blackouts, the reduction in electricity generation and the restrictions on transport suggest that there are no generous cushions of energy reserves that would enable the economy to keep going for any prolonged period without Venezuelan supplies. The pressure on other suppliers tends to raise the price and hinder the search for replacement sources, reducing still further the immediate prospects of restructuring.

The reduction or disappearance of trade with Venezuela would have similar effects to those observed in the 1990s, but amplified by the accumulated fragility and by the energy siege. There would be an additional fall in GDP, greater disruptions to the balance of payments, shrinking imports and exports, and a deterioration in the fiscal balance, with a widening deficit after a recent limited reduction. All this would have a devastating effect on household consumption, aggravating current levels of poverty and scarcity.

As occurred in the 1990s, an external shock of this kind would have consequences for monetary stability. Greater inflationary pressures are foreseeable, and an increase in the black-market exchange rate for an economy that has not managed to solve its inflation problems and in which the informal currency market continues to play a central role, despite the efforts of the central bank to reassert a degree of control. In these circumstances, the economic and social damage would be greater than that suffered three decades ago.

The foreign policy crossroads

Shortly after the military operation in Venezuela a jubilant Trump claimed it would not be necessary to intervene in Cuba, since what remained of the revolution would take care of its own collapse. The disastrous socio-economic situation was described by Marco Rubio as befitting a failed state. In so doing he seemed to revive, in a different context, John Quincy Adams’s Ripe Fruit doctrine, which postulated in 1823 that Cuba would automatically gravitate towards the orbit of the US.

Secretary of State Rubio, who is of Cuban descent, was for many years at the forefront of those Republicans and Cuban exiles who demanded the fall of the regime in Cuba, whether by the easy way or the hard way. Now the time may have come to put an end to the post-Castro single-party dictatorship, which is going through a time of historic decline. The Cuban crisis, just like its Venezuelan counterpart, has unleashed a mass exodus of citizens numbering around two million people. The closure of the sea lane between the US and Cuba is the only thing that has avoided another wave of boatpeople, as witnessed in the 1990s.

In political terms, the demise of Maduro and the advent of a Venezuela under greater US control have obliged the Cuban government to redirect its foreign policy. In the current scenario, the regime runs the risk of losing its links to the Bolivarian revolution without the possibility of finding ideologically likeminded partners in other regions. The current circumstances involve multiple risks for Cuba’s medical internationalism; the writing could be on the wall for Cuba’s so-called south-south projects, the ALBA initiative and the export of the revolution.

Meanwhile, Washington’s clear warning to China and Russia that the US continues to dominate –by force if necessary– its own backyard, especially Central America and the greater Caribbean, hinders the chances of Cuba broadening its relations with China, Russia and Iran. The regime therefore has few options left and runs the risk of getting isolated in a geopolitical void.

One potential ally for the government might have been its foremost trading partner and investor, the EU. The likelihood of the EU being prepared to challenge the US on the Cuban question is rather small, however, when it has more complex foreign policy issues to address, such as Greenland and Trump’s expansionism. The EU’s timid declarations in the wake of 3 January suggest little support for Cuba and its authoritarian government, which continues to receive criticisms in the European Parliament.

Cuba has few allies left in Latin America. Brazil could be a major political partner in a region that is divided against the US, but economically it provides no alternative to Venezuela. Financial relations have been tarnished by the accumulation of missed debt repayment deadlines. Mexico seems to be one of the main regional shock-absorbers on the energy front. President Claudia Sheinbaum seems to be inclined towards maintaining the supply of crude oil and fuels to Cuba. Sheinbaum also faces complex relations with Washington, however, and will need to negotiate a decisive challenge in the coming months: the compulsory review of the North American Free Trade Agreement (NAFTA), which is crucial for the stability of her economy.

The need to negotiate

In the new geopolitical scenario, the government will be obliged to seek some kind of negotiation. The problem is that it has historically shown little willingness to commit itself to significant economic and political changes as part of any deal. An apparent overestimation on the part of the political elite of its internal strength and Cuba’s international political status has undermined the rationality of its negotiating stance. Meanwhile, Donald Trump’s constant threats and pressure do little to lay the groundwork for a process of negotiation and dialogue.

Domestically, each passing day increases the chances of a resurgence of mass street protests like those of 11 July 2021. The government can halt them only by deploying police and security forces, and arresting hundreds of people, many of whom will end up swelling the ranks of political prisoners. This is a scenario that the government would clearly wish to avoid, in light of the Venezuelan precedent and Rubio’s desire to see regime change in Havana.

What future lies in store for Díaz-Canel’s government amid the prospect of further social breakdown and a return of protests? The US put a stop to migration in 2024 when it included Cuba, along with Venezuela, on its blacklist of countries with extremely harsh entry restrictions. The departure option that led almost two million Cubans to leave the island following the pandemic has thus been pushed to the margins. With the possibility of departure being so limited, all that remains is to protest against a regime that has induced profound economic and social deterioration, and that restricts political pluralism by means of persecution and prohibition of the opposition and demonstrations.

Díaz-Canel’s government could be next in the sights of Donald Trump, determined as he is to reconquer and subjugate what he deems to be his ‘home region’. A military attack on Cuba cannot be ruled out if it does not negotiate with the US. Trump has already suggested that the government should ‘make a deal, before it’s too late’, to which Rubio added: ‘If I lived in Havana, and I was in the government, I’d be concerned’. A military operation would face complex barriers of domestic legitimation –in the courts and in Congress–, however, insofar as it would be harder to sustain a casus belli based on verifiable links to drugs trafficking or the existence of a substantial economic or strategic interests that would justify the action within the parameters of US national security.

The capacity for Cuban resistance would be limited in the face of a potential US military attack, given the weakness of the regime and its disadvantage in equipment and technology, after the progressive weakening of the Revolutionary Armed Forces (Fuerzas Armadas Revolucionarias, FAR). Amid the hostility of its neighbour and in the wake of the failed Bay of Pigs invasion, prior to 1989 Cuba spent more than 6% of its GDP on defence. The fraying of its ties to socialist countries in the post-Cold War era led to a substantial fall of up to 2.88% of GDP, according to the most recent official figures (2018). Out of 50,000 service personnel, 80% belong to the army and only 8,000 make up the air force. Although military service is obligatory for men and there are territorial defence militias, it is by no means certain that large sections of the population would join an armed struggle to defend a revolution in outright decline.

The economic needs, the military threats and the geopolitical situation will at some point force the regime to negotiate possible ways out with Washington. When this happens, lifting sanctions to permit investments from the US and its powerful Cuban-American lobby could prove to be of mutual benefit without, in principle, jeopardising political stability. The release of political prisoners could be another gesture to dampen Trump and Rubio’s zeal, at little cost to the regime. Other concessions –such as moves towards democracy– are likely to be ruled out by the political elite because they incur substantial risks for a government with corroded legitimacy and little or no support.

In addition to releasing almost 1,000 political prisoners, an eventual negotiation could see the Cuban government creating opportunities for US companies to reconstruct a country whose infrastructure has suffered the destructive effects of almost seven decades of revolution, and the return of nationalised US assets, in exchange for lifting sanctions, including the extraterritorial Helms-Burton Act –enacted 30 years ago this year– and the Torricelli Act, which demands the return of property in US ownership prior to the revolution. Although the latter may be of interest to Trump and to part of the Cuban-American community he says he supports, the Díaz-Canel government has much less to offer than Venezuela’s.

Conclusions. the scenarios facing the regime

While international attention was shifting towards Iran and Greenland, the Cuban regime tried to win a little time by contemplating possible scenarios, rethinking its options and trying to determine its next move on the geopolitical chessboard. The 1959 regime saw off not only 13 US Presidents but also George W. Bush’s attempt to engineer democratic transition from the US by his appointment of a Cuba Transition Coordinator, who later fell into oblivion. The pressures on the Cuban regime can manifest themselves not only in the form of military threats, but also with financial and energy measures that attack its dependency on Venezuela and imported fuel. Although Cuba’s economic dependency on Venezuela has diminished, it continues to be significant and accounts for around 30% of Cuba’s foreign trade. Were this trade to fall further or cease, it would be extremely hard for Cuba to replace it. It would be impossible for the ‘doctors-for-oil’ arrangement to be replicated by other countries on a comparable scale. Nor is there an immediate domestic solution. There are no economic policies or reforms that, in the short term, could make up for an impact of such magnitude. Cuba would require international aid, whether from its traditional allies or in the form of negotiations with the US.

The most optimistic financial scenario involves the Venezuelan government using eventual talks to secure a loosening of sanctions and a lifting of the blockade on its tankers in exchange for commitments on the US interests underlying recent US military actions: access to oil, greater control of drug trafficking and a democratic transition; and ensuring that the US allows oil supplies to continue flowing in order to head off a humanitarian and migration crisis, pursuing the same political pragmatism as applied to Venezuela, one that prioritises stability over changing a chaotic and disorganised regime.

The most catastrophic economic scenario for Cuba would involve an immediate or precipitous withdrawal of its medical missions (the country’s main export) and shipments of oil. The supply of crude is subjected to additional difficulties owing to the blockade of tankers and threats to third-party suppliers. The Cuban economy does not have productive sectors with the competitiveness necessary to replace income accrued from exports of medical services, nor the currency reserves to buy oil on other markets. If supplies dwindle to nothing, the economy will be paralysed.

It remains to be seen what aid is forthcoming from Mexico, Brazil, Russia, China and the EU. Until now, financial aid has been negligible owing to the lack of belief in the economic model and its high rate of indebtedness. In the current international context –characterised by a more unpredictable US foreign policy that is detached from the norms of international law– it is likely that governments prioritise other interests and avoid taking on additional costs. Their own negotiations with Washington on trade and tariff matters, as well as their geopolitical and territorial priorities, may reduce their willingness to aid Cuba even further.

In light of what happened in Venezuela and may yet befall other countries, it is clear that in his second term Donald Trump has ditched being a Jacksonian isolationist in favour of shaping the world at his whim, with no sign of anyone standing in his way. For the time being, China and Russia have not protested unduly about the military operation in Venezuela. Brazil is in a minority position and the EU is formulating its stance on the US threat to seize Greenland, thereby attacking an ally and fellow member of NATO. In an eventual escalation against the Cuban regime, it is by no means clear that Havana could count on sufficient external support to dissuade or contain US pressure.

La entrada Cuba and a possible loss of Venezuelan support: macroeconomic vulnerabilities and political risks se publicó primero en Elcano Royal Institute.

For many Kurds, the spectacle of war descending from the sky in 2026 evokes a sense of déjà vu.

Night skies over Sulaymaniyah are filled with the buzz of drones and the distant thud of incoming missiles. Across Iraqi Kurdistan, anxiety is growing as an expanding regional confrontation edges closer to Kurdish territory. The region has reportedly been targeted by over 630 drones and missiles since the start of the war waged by Israel and the US against Iran, killing at least 14 people and wounding 93 others. US President Donald Trump initially called on Kurdish fighters to enter Iran in support of the campaign, but later appeared to back away from the proposal. The idea was met with near universal opposition from Kurdish leaders. Kurds are not ‘guns for hire’, warned Shanaz Ibrahim Ahmed, Iraq’s first lady and an ethnic Kurd. They know all too well how this story tends to end. Close to 100 years ago, the Kurds were betrayed after siding with the British to fight the Ottoman Empire during World War I.

For many Kurds, the spectacle of war descending from the sky in 2026 evokes a sense of déjà vu. It was in 1926 when British aircraft pounded the city to crush the Kurdish leader Sheikh Mahmud Barzinji after he declared himself king and pursued an independent Kurdistan. Just as the British promised the Kurds a state carved out of the Ottoman Empire, 100 years later, the US has asked the Kurds to carve out a state from the Islamic Republic of Iran, whose borders were inherited from the last Persian Empire, the Qajars. Then as now, the Kurds found themselves caught between the ambitions of larger powers.

The earlier bombardment came at a moment when the political map of the Middle East was still being violently redrawn. After the collapse of the Ottoman Empire, nationalist movements swept the region, encouraged in part by US President Woodrow Wilson’s rhetoric that all nations had a right to self-determination. In this atmosphere, the Kurdish religious and tribal leader Sheikh Mahmud Barzinji declared himself King of Kurdistan in 1922, claiming Sulaymaniyah and the surrounding areas. No stranger to pragmatic alliances, Barzinji had fought alongside the British against the Ottomans during the war, only to turn against them when Kurdish hopes for statehood began to fade. London responded with a new instrument of imperial control. Winston Churchill, the Pete Hegseth of his day as UK War Secretary, ordered the Royal Air Force to conduct ‘aerial policing’ of the Iraq mandate. Between 1923 and 1924 British aircraft repeatedly bombed Sulaymaniyah and nearby villages. The campaign succeeded and Barzinji’s short-lived kingdom collapsed. The man who had dared to crown himself king was eventually forced into exile and political obscurity.

The fall of Barzinji’s kingdom was the result of diplomatic horse-trading conducted far from the mountains of Kurdistan. In the immediate aftermath of the World War I, Kurdish aspirations had briefly gained recognition on the international stage. The Treaty of Sèvres in 1920 raised the possibility of a Kurdish state carved out of the ruins of the Ottoman Empire. But three years later, the Treaty of Lausanne erased those provisions as the victorious powers settled on a different map of the Middle East. The oil-rich Mosul Vilayet north of Baghdad was incorporated into the new, British-backed state of Iraq, leaving the Kurds scattered across four countries –Iraq, Turkey, Iran and Syria–. For Barzinji and many others it was a betrayal of wartime assurances. As he reportedly told the British officials: ‘You promised us a Kurdistan’.

The final contours of this new order were settled a few years later. In 1926 the League of Nations confirmed that the Mosul Vilayet would remain part of the newly created state of Iraq, effectively fixing the borders that still define much of today’s Iraqi Kurdistan. The monarchy installed in Baghdad under Faisal I operated under heavy British influence, and Kurdish hopes for full-fledged independence gave way to a struggle for autonomy within the Iraqi state. Over subsequent decades, Kurdish politics settled into an unfortunate pattern of uprisings, negotiations and bitter compromises with Baghdad. In the 1960s the Iraqi Air Force repeatedly bombarded villages in and around Sulaymaniyah during successive rebellions, further embedding the memory of aerial attack into the Kurdish psyche. Through it all, Sulaymaniyah retained its place as the symbolic heart of Kurdish nationalism. The memory of Sheikh Mahmud Barzinji still lingers in the city today, where a large portrait of the would-be king stands near the entrance to the bazaar.

A century on, the Kurds of northern Iraq now enjoy a degree of autonomy their predecessors could scarcely have imagined in the 1920s. Since the 1991 Gulf War and the establishment of a Western-enforced no-fly zone, the Kurdistan Regional Government (KRG) has built many of the trappings of self-rule, including its own parliament and the Peshmerga security forces. Yet that autonomy remains fragile. Economic disputes with Iraq’s central government, rivalries between Kurdish political factions and unrelenting pressure from neighbouring powers limit how far it can extend. Geography still dictates the region’s fate. Sitting between Iran, Turkey, Syria and Iraq, Kurds are repeatedly drawn into conflicts they neither seek nor support. The recent abandonment of Kurdish forces in north-eastern Syria by the US, which cleared the way for a Turkish offensive, was yet another illustration of how alliances forged in war can dissolve quickly when larger strategic calculations shift.

The danger today is that history may be repeating a familiar pattern. Yesterday’s aerial bombardments have given way to drones. For Kurdish fighters accustomed to guerrilla warfare in the mountains, even their asymmetric tactics offer little protection against the precision and reach of unmanned aircraft. In 2020 the war between Armenia and Azerbaijan showed how quickly drones can dismantle a conventional army, striking armour, artillery and troop positions with devastating accuracy.

In the confrontation between Iran and the Israel-US alliance, Iraqi Kurdistan risks once again becoming a staging ground in someone else’s war. A century ago, Kurdish fighters allied with British forces during the final years of World War I, spurred by the promise of a state of their own. In recent years they have fought alongside Western coalitions, this time against the Islamic State. Yet strategic partnerships forged in moments of crisis often weaken or dissolve once the larger geopolitical objectives of outside powers are achieved. For the Kurds, the hum of aircraft overhead is not just the sound of war. It is the echo of a century of unfinished history.

La entrada In Sulaymaniyah every drone recalls a century of betrayal se publicó primero en Elcano Royal Institute.

The failure to agree a treaty would have been a bad for everyone, as it would have meant a hard and not a fluid border. Around half of Gibraltar’s working population of some 30,000 crosses the border daily, most of them Spanish nationals, as well as many tourists. The territory, which voted 96% in favour of remaining in the EU in the 2016 Brexit referendum, accounts for an estimated one-quarter of the employment of those living in the much poorer and adjacent Campo de Gibraltar just over the frontier. Gibraltar’s economy could not function without them (see Figure 1).

Figure 1. Key facts on Gibraltar

Under the treaty, weighing in at more than a thousand pages and taking far longer to produce than the Brexit Withdrawal Agreement, Gibraltar, for the purposes of free movement, will effectively be part of the EU’s passport-free Schengen area. Immigration checks will take place at Gibraltar’s airport –and, if needed, the port– rather than the land border. This ends the often-lengthy queues there; part of the 1.2km border fence will be removed. José Manuel Albares, the Foreign Minister, described the removal as bringing down ‘the last wall in continental Europe’, comparing it to the dismantling of the Berlin Wall. Franco closed the border in 1969 and it was not fully re-opened until 1985, shortly before Spain joined the EEC.

Passports will be shown to both Gibraltar and Spanish border officers inside a shared facility that spans the border line known as the ‘Schengen shack. This system mirrors the Eurostar-style dual border checks (British and French) conducted before departure at St Pancras railway station in London.

Gibraltar was not covered in the negotiations on the new UK-EU agreement that culminated in the UK-EU Trade and Cooperation Agreement (TCA) in December 2020. Instead, the UK and the EU agreed on a framework for negotiations on a separate agreement on Gibraltar’s new relationship with the EU, which required the prior agreement of Spain.

The treaty is without prejudice to the respective legal positions of the UK and Spain in respect of sovereignty and jurisdiction. Spain has long claimed Gibraltar, ceded to Great Britain under the 1713 Treaty of Utrecht. The UN defines Gibraltar as a ‘non-autonomous territory that must be subjected to a process of decolonisation’. Furthermore, it states that decolonisation must be undertaken through bilateral negotiations between Spain and the UK, negotiations that the UN has been recommending since 1965.

Following the Brexit referendum, the Spanish government tabled a proposal at the UN for joint Spanish-UK sovereignty over Gibraltar, joint UK-Spanish nationality for Gibraltarians and a special status for Gibraltar within the EU. The proposal was rejected by the Gibraltar government. Gibraltarians voted 99.2% in favour of remaining under British sovereignty in the 1967 referendum, and in 2002 98.9% of voters rejected a proposal for joint UK-Spanish sovereignty.

The Gibraltar treaty is pragmatic, as it needed to be (see Figure 2). Both sides can claim victory. For example, Spain has ‘boots on the ground’, a sensitive issue, which was required if the territory was to be part of Schengen for travel, and there is more of a level playing field on taxes. A higher transaction tax replaces import duty, starting at 15% on 10 April and rising to 17% by 2028 (in line with the lowest standard rate of VAT in the EU). ‘The boots will be there, but in the joint facility, not outside’, said Fabian Picardo, Gibraltar’s Chief Minister, who insists sovereignty remains intact.

Figure 2. Key provisions of the draft UK-EU agreement on Gibraltar

EU nationals and non-EU nationals who reside legally in the bloc are allowed to enter Gibraltar for up to 90 days in any 180-day period. The reverse applies to Gibraltar residents. Treaty provisions under which Spain can object to a residency permit issued by Gibraltar only apply to foreign nationals, not to Gibraltarians. Gibraltar will notify Spain about foreign nationals, whose authorities can object if there is ‘a threat to public policy, internal security, public health or the international relations’ of any EU state, including on the basis of an alert in the EU’s Schengen Information System.

The transaction tax on goods is bad news for shops, largely concentrated in Gibraltar’s Main Street, as it diminishes one of the territory’s main attractions. The counter argument is that a hard border would likely have meant a drop in footfall, while the treaty should help attract more visitors and will allow shops to sell to the wider EU market. There will be no tax on services (not covered by the treaty) for companies in the financial, gaming, gambling and tech sectors. Gaming accounts for 30% of Gibraltar’s GDP and employs around 3,500 people.

Continued access to the EU single market, notably in relation to services, is vital for Gibraltar. Three of the four main sectors of its economy (tourism, financial services and online gaming) were developed on the basis of access. The financial services and gaming sectors, however, are primarily UK-facing. This was key to their continued growth after Brexit and was protected by a bilateral deal with the UK allowing access to the UK market for Gibraltarian companies.

Paradoxically, Gibraltar is now more integrated into the EU out of the bloc than when the UK was part of it, but it is not fully integrated into Schengen. The treaty is the closest to membership that is on offer. Hardline Brexiteers in the UK view the treaty as a betrayal, which Picardo refutes. ‘After Brexit, doing nothing would have left Gibraltar with a hard border: delays of up to six hours would have inflicted a devastating cost’, he said. ‘Compared to a non-negotiated outcome, this treaty could open economic value worth an estimated £200mn per year for Gibraltar, equivalent to roughly 6% of our GDP’.[1]

The treaty ends years of disagreement over the airport when Gibraltar was part of the EU and Spain blocked attempts to develop the Rock’s air connectivity. Prior to Brexit, Gibraltar was entitled to EU air connectivity as of right but this was blocked by Spain. That right was lost after Brexit. Thanks to the treaty, UK airlines can continue to operate between Gibraltar and the UK, while EU airlines will be able to fly between Gibraltar and the EU. ‘While we were in the European Union, the airport was an area of controversy’, said Joseph García, the Deputy Chief Minister. ‘Now that we are outside the European Union, it is set to become an area of cooperation’.

Alberto Nuñez Feijóo, Spain’s Popular Party leader, who would have pushed a harder line in the treaty negotiations had he been in power (today with the support of the hard-right VOX, according to the latest polls), views the UK as the main winner. VOX says that since ‘Gibraltar is a territory illegally colonised by the United Kingdom’ it follows that, ‘Any agreement that does not contemplate the total reintegration of that territory under Spanish sovereignty is illegal, illegitimate and unjust’.

The treaty text gives the UK and the EU powers to end the agreement. The EU, because of its legal structure, also agreed to give Spain those powers. Whether this happens depends on whether both sides believe their interests over time are being served.

[1] See The post-Brexit deal for Gibraltar is not ‘betrayal’ – it is a triumph, The House, 4/III/2026.

La entrada Gibraltar set to feel the impact of its new reality se publicó primero en Elcano Royal Institute.

• Immigration into Spain from Africa accounts for 17% of the total and for 20% of the immigration from outside the EU. Moroccan immigration accounts for almost three quarters of all immigration from Africa.
• The average level of educational attainment is the lowest of all immigrant groups: a fifth did not complete primary schooling and only a tenth hold a university qualification.
• This type of immigration is the least likely to enter the employment market, especially in the case of female Moroccan immigrants: only 42% of the latter seek or are in work.
• Their unemployment rate is the highest, especially in the case of Moroccan immigrants (27%), which is three times that of their Spanish-born counterparts (8%) and much higher than that of sub-Saharan Africans (16%).
• They account for 3% of workers in Spain, but 15% of workers in the agricultural sector. The role they play in agriculture is essential to sectors in various intensive-farming areas in the south of the country. In Murcia 36% of agricultural workers are immigrants of African origin, with 34% in Almería and 24% in Huelva.
• The teenage school drop-out rate in this group is the highest: 55% of sub-Saharan immigrants aged 16-20 are not in education and the same is true of 26% of Moroccans. Among the latter, the problem affects males (37%) much more than females (16%).
• The birth rate among Moroccan immigrants is the highest of all immigrant groups, hence the fact that the second generation of Moroccan origin outnumbers the first. Up to 31% of all those born in Spain to an immigrant mother and father are children of Moroccan parents.

Analysis

This paper is the third in a series the Elcano Royal Institute is conducting into how immigrants are integrating into Spain’s employment market. The first, titled ‘Immigration and the employment market in Spain’, analysed the entire immigrant population and its most salient characteristics in terms of its relationship with the employment market, while its successors delve deeper into each of the largest groups classified by geographical origin. The study in this case focuses on immigrants of African origin, whose arrival dates back to the last century, first on a small scale from former Spanish colonies such as Equatorial Guinea and the Western Sahara, and, starting in the 1980s, with greater numbers originating mainly in Morocco, which at that time became the greatest source of African immigrants in Spain.

As with the other papers in this series, the main sources that have been used are the Continuous Municipal Register (Padrón Continuo de Población), the Continuous Population Statistics (Estadística Continua de Población) and the Active Population Survey (Encuesta de Población Activa, EPA, with microdata for the fourth quarter of 2024), all compiled by the National Statistics Institute (INE). Based on such data, the analysis focuses on the fundamental features of African immigration in Spain and subsequently sets out information regarding its integration into the employment market, for both the whole group and the two subgroups whose sample size in the EPA enables statistically significant results to be obtained: Moroccans and sub-Saharan Africans.

The context: size, evolution, composition and characteristics of African immigration in Spain

As mentioned in the other documents in this series, it is worth recalling the definition of international migrants used by the United Nations (UN) and its Population Division, which is the one used here: international immigrants are people who live in a country other than the one in which they were born, regardless of their legal status in the country where they live. Thus, defined as ‘born abroad’, according to the most recent aggregate data from the INE’s Continuous Population Statistics, African immigrants in Spain as at 1 January 2024 numbered 1,524,788 (Figure 1), accounting for 3% of all those resident in the country and 17% of the immigrant population, the latter percentage having undergone little variation since the start of the century. The presence of African immigration in Spain –fundamentally of Moroccan origin– started to become locally notable in the 1980s, with particular concentrations in rural areas near the Mediterranean coast. Numbers multiplied threefold between 1992 (71,292 people) and 1999 (213,012), although such data should be treated with considerable scepticism, given the poor immigration records that were compiled in Spain prior to the year 2000.

Unlike immigrants from other continents, who exhibit considerable variety in terms of their composition, just one country in the case of African immigrants –Morocco– has always constituted the largest source. Thus, on 1 January 2024, 1,092,892 people born in Morocco were living in Spain, accounting for 72% of all those born in Africa (Figure 2). 26% of immigrants of Moroccan origin had Spanish nationality, a significant percentage but considerably less than the 45% of Latin American immigrants and the 52% of those from Equatorial Guinea, the only Africans with access to the fast track to Spanish nationality.[1] Aside from immigrants originating from Morocco, the only African groups with more than 40,000 people resident in Spain are Senegalese and Algerian (95,812 and 87,854 respectively).

There is hardly any difference between the age pyramid of the population of African origin and other immigrants originating from countries with lower per capita income than Spain’s, with a high concentration between the ages of 25 and 49, the range with the greatest employment activity. There is, however, a notable difference with regard to gender. African immigration is the only one to show a clear male preponderance: 61% of African immigrants residing in Spain are men, a percentage that rises above 80% among Malians and Gambians (87% and 82%, respectively). The only African country with data broken down by gender whose population in Spain is predominantly female (63%) is Equatorial Guinea.

In terms of their geographical distribution, African immigrants are less concentrated than other immigrants in the main urban areas or in the archipelagos. They are distributed more evenly throughout the country, with a greater presence in provinces where farming plays a major role, whether in the form of intensive crop cultivation and/or the livestock and cannery industries (Catalonia, Almería and Murcia). Ceuta and Melilla are special cases. In both cities the Moroccan-born population has a much greater preponderance than in the rest of Spain: 21% of Melilla’s residents and 11% of Ceuta’s residents were born in Morocco, although the total population of Moroccan origin (including the children and grandchildren of Moroccans) is estimated at 40%-55%.[2]

African immigrants’ integration into the Spanish employment market

Based on the microdata contained in the Active Population Survey(EPA, 4Q24), it is possible to set out the main features characterising the manner and intensity of African immigrants’ integration into the Spanish employment market. The data refer to individuals aged 25-59, to exclude youngsters still in education and adults who have retired from the labour market, thereby providing a group comparable to their native counterparts (defined as born in Spain to two parents also born in Spain), among whom active employment is very low outside this age range. The data are also compared to that of immigrants from other countries with lower per capita income than Spain’s[3] and broken down in order to compare the two African subgroups whose EPA samples are large enough to ensure that such a comparison is significant and that together account for 94% of the total: Moroccans and sub-Saharan Africans.[4]

An important factor that determines integration into the employment market is educational attainment, and here the level of African immigrants is particularly low: a fifth of African immigrants aged 25-59 did not complete primary education (21% of Moroccans and 19% of sub-Saharan Africans); 9% of the Moroccans and 6% of the sub-Saharan Africans are illiterate. At the other end of the scale, only 10% of African immigrants have a university qualification, a much lower percentage than Asian and Latin American immigrants. Overall, no other group of immigrants records such low scores in the educational domain. The chief difference between the educational attainment of Moroccans and sub-Saharan Africans is the higher percentage of individuals with non-compulsory secondary education among the former.

The data for immigrants of African origin harbour a major gender difference which, in the case of Moroccans, is negative towards women and, in the case of sub-Saharan immigrants, negative towards men.

Analogously, the rates of activity and, in particular, those of employment[5] for all immigrants originating from Africa are notably lower than those for their Spanish-born counterparts and the other immigrants studied. In this case, however, there are marked differences between the two African subgroups, with Moroccans showing much lower rates. Specifically, the Moroccans’ activity rate is 19 percentage points lower than the rate for sub-Saharan Africans, while the employment rate is 23 percentage points lower.

The Moroccan immigrants’ especially low participation in the employment market can be attributed to the very low occupational activity of the women in this group, who are mostly inactive outside the home. Thus, whereas 73% of sub-Saharan women work or are actively seeking work, the percentage in the case of Moroccan women is just 42%.

Despite African immigrants’ low activity rate, which ought in principle to correlate with a low unemployment rate, the latter runs at an extremely high 25%, more than double the rate of Latin Americans and more than three times that of native Spaniards. Again, there is a major disparity here between Moroccans and sub-Saharan Africans, with far higher unemployment among the former.

Employment among immigrants of African origin shows a high concentration in the agricultural sector, where 15% of Moroccans and 18% of sub-Saharan Africans work: no other group has such a high percentage of its workers employed in this sector. Only 3% of native Spaniards work in agriculture, fishing and livestock, and the percentages are even lower for Latin American and Asian immigrants. African employment is also higher than the other immigrant groups in the industrial sector (especially the food industry and, within this, meat processing) and in construction, but lower in the hospitality industry and domestic activities. Within the group, Moroccan immigrants have a higher presence in construction and retailing –in the case of retailing often as self-employed workers or entrepreneurs– whereas sub-Saharan Africans work more in the agrifood sector.

African immigrants account, in total, for only 3% of all workers in Spain, but they have a much greater presence in the agricultural sector, where they make up 15% of the workforce. This percentage is distributed very unevenly in the country: the farming sector’s dependence on immigrants of African origin is far greater in provinces specialising mainly in intensive farming, such as Almería, Huelva and Murcia. Up to 36% of farm workers in Murcia are immigrants of African origin, 34% in Almería and 24% in Huelva.

Next in the list of sectors ranked by the percentage of African immigrants among their workers is ‘Construction’ (6%), followed by ‘Hospitality’ (5%) and ‘Domestic activities’ (4%).

In terms of their ‘occupational situation’, African immigrants’ profiles are similar to those of their Latin American counterparts, despite their dissimilar levels of educational attainment and pathways to gaining Spanish nationality: the vast majority are employed as wage-earners in the private sector, a minority are self-employed and, as a group, they have a marginal presence in the public sector (something that is common to all groups of immigrants originating from low-income countries). Although 27% of African immigrants have already been granted Spanish nationality, enabling them to overcome the legal barrier to joining the public sector, their minimal presence in this sector, far below that of Latin American immigrants, seems likely to be related to their lower educational attainment.

As far as entrepreneurship is concerned, the data again reveal a difference between Moroccans and sub-Saharan Africans: 11% of Moroccans are self-employed or work as entrepreneurs, compared to 4% of sub-Saharan Africans. A quarter of Moroccans (25%) who work in retailing are self-employed and another 8% are salaried entrepreneurs. It is likely that many of the Moroccans who are salaried workers in retailing are employed by Moroccan entrepreneurs, but the data do not enable this hypothesis to be confirmed.

In line with their educational attainment and occupational sectors, more than a third of African workers (and more than half in the case of sub-Saharan Africans) are found working in ‘basic occupations’, which is much higher figure than for Latin American and Asian workers. By contrast, the number of Africans in ‘white collar’ occupations such as ‘Directors and managers’, ‘Technicians and scientific and intellectual professionals’ and ‘Accountants and administrators’ amount to only 8%, manifestly behind their counterparts. Meanwhile, the EPA does not record a single immigrant originating from Africa enrolled in the armed forces, something for which Spanish nationality is required (immigrants from Equatorial Guinea are exempted from this rule).

As far as the earnings of African immigrants are concerned, the statistics published by the Social Security Administration (TGSS)[6] for average taxable income only differentiate data for people of Moroccan nationality.

According to these figures, the average taxable income of Moroccan taxpayers in December 2024 was €1,554/month, 32% lower as a group than their Spanish counterparts, although the gap between the taxable incomes of Moroccan women compared with Spanish women widened to 38%: €1,288 as opposed to €2,082. Indeed, of all the nationalities recorded in the TGSS statistics, the lowest female average taxable income pertains to Moroccan women, at €81 below the next female group on low incomes, namely Bolivian women.

With regard to generation 1.5 of African immigrants in Spain, in other words those born in African countries and arriving in Spain as children or teenagers, the EPA data enable us to determine what percentage of those aged 16-20 continue in education, once their compulsory schooling has ended. This is an important figure because it foreshadows future situations in relation to the employment market. Up to 65% of African immigrants aged 16-20 continue in education, a percentage similar to their Latin American counterparts (66%) but far below that of native Spaniards (86%) and also below that of Asians (77%). Put the other way, the educational drop-out rate among African immigrants is 35%, the highest in Spain, which, in turn, has one of the highest figures in the EU owing to the large percentage of immigrants within the student body. This high educational drop-out rate incurs difficulties for subsequent integration into the labour market on the part of those who do not continue with their schooling: they will be restricted to basic tasks requiring little by way of training and, consequently, low wages and poor working conditions.

The problem affects youngsters of sub-Saharan origin disproportionately: 55% do not continue in education, compared with 26% people of Moroccan origin. There is a striking difference in favour of women amongst youngsters of Moroccan origin: the drop-out rate among females is 16%, compared with 37% among males. This means that, in the medium term, the educational disadvantage suffered by female Moroccan immigrants compared to their male counterparts will disappear and start to work the other way (with men at an educational disadvantage).

The EPA sample of second-generation immigrants (born in Spain) whose mother and father are both of African origin is too small to produce significant data. It is likely that, as occurs with all second-generation immigrants originating from lower-income countries, the educational outcomes for generation 2.0, incorporated into the Spanish educational system from the outset, will in general be insufficient and concerning, but somewhat better than those of generation 1.5, whose members arrived at some point in their childhood or adolescence. It will be necessary to obtain data on this subject, information that the educational system does not currently compile, especially in the case of the offspring of Moroccan immigrants, due not only to the size of this group but also its high fertility rate: Moroccan immigration, which accounts for 11% of the total, produces 20% of the births to immigrant mothers; in other words, it doubles the average birth rate of immigrant women.[7] Indeed, the number of second-generation Moroccan immigrants (born in Spain to a mother and father born in Morocco) is already 31% of all second-generation immigrants born in Spain; in other words, it is three times the percentage of all first-generation immigrants who were born in Morocco (11%).

Conclusions

Altogether, African immigration accounts for 17% of all immigrants resident in Spain and, of this, almost three quarters (72%) is made up of Moroccan immigration, the oldest in Spain. They are the largest group in the country (around 1,100,000 people), although they about to be overtaken by Colombian immigration if present trends continue. The immigration deriving from the rest of the continent is highly heterogeneous in its origins: none of the national groups exceeds 100,000 individuals and most number less than 40,000.

As with the other immigrant groups arriving from countries with lower incomes than Spain’s, the age range for the bulk of African immigration is between 25 and 49 years old. It exhibits two characteristics that are uncommon among other immigrant groups, however: a notable masculinity (more males than females) and a greater presence in rural and semi-urban settings, in contrast with other immigrants’ tendency to gravitate to large cities.

The educational attainment level of African immigrants in Spain is particularly low in comparison with other immigrants and much lower than the native population. This fact decisively conditions their integration into the world of work, restricting it to the most basic activities requiring fewer qualifications. Their concentration in agricultural occupations is another consequence of their educational attainment level.

Low earnings –and consequently modest contributions to Social Security– are another outcome of this combination of a low level of training and employment in basic activities: the average earnings of Moroccan employees are among the lowest that are recorded by nationality by the Social Security Administration for both sexes and are the lowest in the case of women.

Their employment and activity rates are significantly lower than those of other immigrant groups, to a large extent because of female Moroccan immigrants’ low participation rate in the labour market. Unemployment is especially high among Moroccans, at 27%, more than three times that of native Spaniards (8%) and substantially higher than among sub-Saharan Africans (16%).

Their employment in agriculture is crucial to the sector, especially in provinces specialising in intensive farming (Murcia, Almería and Huelva).

The school drop-out rate among teenage African immigrants is a cause for concern, because it augurs difficulties for second generations’ successful social and occupational insertion.

The high fertility rate of female Moroccan immigrants, much greater than that of immigrants as a whole, presages a demographic outlook in which Spain’s population of Moroccan descent is set to form a growing part of the total population.

[1] Those born in the Spanish-speaking countries of Latin America, Andorra, the Philippines, Equatorial Guinea, Portugal and those of Sephardic origin can apply for Spanish nationality after two years of authorised residence in the country. The rule for other immigrants is 10 years of prior residence.

[2] No data are available regarding the size of the population of Moroccan origin in Ceuta and Melilla. An outdated estimate may be found at: https://www.realinstitutoelcano.org/analisis/melilla-lecciones-inadvertidas-de-integracion-ari. More than 90% of babies born in Ceuta and Melilla are given a Muslim name (INE).

[3] In this analysis, the ‘Africans’ group includes all immigrants hailing from that continent whose home countries are identified in the EPA. Unless stated otherwise, the population being scrutinised is confined to the 25-59 age range. For more detailed information about the characteristics of these groups, see the ARI titled ‘Immigration and the employment market in Spain’.

[4] The sub-Saharan countries with samples included in the EPA are Angola, Cape Verde, Cameroon, Ethiopia, Gambia, Ghana, Guinea, Guinea Bissau, Equatorial Guinea, Mali, Mauritania, Nigeria, the Democratic Republic of the Congo, Senegal and South Africa. Non-Moroccan North Africans, mostly Algerians, account for 6% of the entire sample of African immigrants in the EPA survey.

[5] The activity rate is defined as the percentage of the population in the age range concerned (in this case, aged 25-59) that is in work or is seeking work, while the employment rate is defined as the percentage of the population in the age range concerned (in this case, aged 25-59) that is in work. The unemployment rate is calculated using the total active population in this age range (not the total population in the age range).

[6] The EPA does not include questions about earned income, making it necessary to resort to the Social Security Administration’s statistics on average taxable income, where individuals are classified by nationality, not by country of birth. The maximum taxable income in 2025 is €4,909 per month.

[7] INE, Movimiento Natural de la Población, births, data for 2024.

La entrada Immigration and the employment market in Spain (III): Africans se publicó primero en Elcano Royal Institute.

• Japan-Europe cooperation against foreign information manipulation and interference (FIMI) is strategically justified by shared interests in preserving an open, rules-based international order. As liberal democracies facing systemic challenges from authoritarian actors, both recognise that information manipulation is embedded in broader geopolitical competition and cannot be addressed in isolation.
• Effective cooperation requires bridging conceptual and institutional differences. The EU’s FIMI framework –behaviour-focused and institutionally embedded– differs from Japan’s terminology and policy culture, which centre on long-term strategic communications through the FOIP construct, and, more recently, on ‘information warfare in the cognitive domain’ as the key label for disinformation-related threats.
• The most feasible avenue for collaboration lies in shared analysis and situational awareness. Developing common analytical standards, OSINT methodologies and mechanisms for information-sharing would allow both sides to better distinguish between the presence and the impact of FIMI campaigns.
• Operational cooperation, including public attribution or coordinated countermeasures, is likely to remain selective and case-specific. Divergent threat perceptions (Russia for Europe; China as a long-term systemic challenge for Japan), legal frameworks and intelligence cultures constrain fully harmonised responses.
• Embedding counter-FIMI cooperation within the broader, fast-developing EU-Japan security partnership would enhance resilience on both sides. An explicit political commitment to structured collaboration on analysis, strategic communications and third-country capacity-building would strengthen collective agency in the information domain.

Analysis

Introduction

Can Europe –the EU and like-minded European states– and Japan cooperate in countering foreign information manipulation and interference (FIMI)? Given the centrality of information manipulation to the strategies of great-power adversaries, cooperation between Europe and Japan –both committed to liberal values and principles– appears increasingly relevant in an era of intensified geopolitical competition and rapid technological change. At the same time, such collaboration may be shaped by differences between Europe and Japan in strategic priorities, terminological and conceptual framing, and institutional and technical capacity and culture.

These dynamics, as well as the broader question of whether FIMI could serve as a useful framework for Europe-Japan cooperation, warrant closer scrutiny. FIMI, a concept developed and promoted in recent years by the European External Action Service (EEAS), reflects particular European geopolitical and strategic assumptions of the current period. Understanding how Japan and the broader Indo-Pacific approach the challenge of information manipulation and information resilience may therefore be important for identifying potential areas of dialogue and cooperation.

This paper examines the historical and geopolitical context shaping Europe-Japan engagement on information manipulation. It considers how Japan’s longstanding emphasis on strategic communications –developed over more than a quarter of a century– relates to its broader approach to the Indo-Pacific, including the concept of a ‘Free and Open Indo-Pacific’ (FOIP). Against this backdrop, the paper explores how European and Japanese approaches intersect and where potential avenues for cooperation in addressing information manipulation might emerge within the evolving landscape of Europe-Japan security relations.

The Free and Open Indo-Pacific (FOIP) as strategic communications and geopolitics in action[1]

First, a brief note on terminology. Strategic communications refers to the long-term shifting and shaping of dominant discourses in societies. It is ‘a holistic approach to communication based on values and interests that encompasses everything an actor does to achieve objectives in a contested environment’. It operates at the level of policy, rather than as short term ‘messaging’ or communication tactics to signal intent. Nor is it a communication to alert the public of ongoing or incoming FIMI attacks or to improvise a ‘response’ to it. Strategic communications is not reactive; it is intended to proactively engage audiences and pre-emptively frame issues in ways that open space for action aligned with certain interests and values. The latter is increasingly recognised as aligning with fundamental freedoms and liberal values.

By contrast, FIMI, and separately, disinformation, are specific forms of subversion undermining an opponent’s policy, perceptions and institutions, and therefore distinct from strategic communications. Such subversions can take countless forms and are primarily expressed through tactics. The EU defines FIMI as a mostly non‑illegal, intentional and coordinated pattern of manipulative behaviour by state or non‑state actors that threatens or negatively impacts values and political processes. Disinformation, the creation/sharing of false/inaccurate information with the intention to deceive or mislead, could be part of FIMI but it focuses on narrative content rather than behaviour, the latter being the focus of FIMI. Rather than FIMI, Japan uses the term ‘disinformation’ officially.

In light of this conceptual distinction, it is important to recognise that Japan has a longer history of engaging in strategic communications than it has with counter-disinformation or FIMI. The ‘Indo‑Pacific’ vision Japan has developed over the past quarter century is in itself long‑term strategic communications. The Indo-Pacific is not just a geographical/cartographical link between the Indian and Pacific Oceans but a political construct expressing Japan’s vision for the emerging region that embeds its interests and values. Japan’s vision draws on former and late Prime Minister Shinzo Abe’s 2007 conception of ‘the Indo‑Pacific’ as a shared democratic and prosperous space linking the Indian and Pacific Oceans, especially through future Japan-India cooperation. The vision was formalised at the Tokyo International Conference on African Development (TICAD VI) in 2016 as the ‘Free and Open Indo‑Pacific’ (FOIP) with three core principles: promoting the rule of law, freedom of navigation and free trade; advancing economic prosperity through connectivity and partnership; and commitment to peace and stability via capacity building and assistance. Against the backdrop of heightened tensions in the East and South China Seas and an increasingly assertive China, the FOIP became Japan’s guiding precept for regional and global engagement in this century and its framework for articulating an inclusive, open, rules‑based order. Hence, the FOIP is not a concept calling for containment of China.

As a core pillar of Japan’s foreign and security policy, the FOIP also fuses geopolitics and strategic communications. Japan’s Indo‑Pacific and FOIP frameworks are intended to guide the proactive shaping of a rules‑based order, rallying like‑minded partners around the core principles of existing international law. Through the exercise of Indo-Pacific discourse, Japan expanded and updated relations with the Quad (the minilateral associations between Japan, India, Australia and the US), with South-East Asia/ASEAN, and with Europe, where the concept of the Indo-Pacific became common knowledge, with slightly different meanings attached by each of these ‘expanded’ Indo-Pacific actors.

Japan’s 2019 National Defense Program Guidelines further cements such a vision. The Guidelines introduced the Multi‑Domain Defense Force and three defence objectives: shaping an international environment favourable to Japan’s interests and values, deterrence and responding when deterrence fails. Strategic communications was explicitly placed under the first objective, implying a constructive take on strategic communications tied to promoting the FOIP and pursued through defence engagement in tandem with diplomacy.

The ensuing 2022 National Security Strategy and associated defence documents propelled a fundamental upgrading of Japan’s defence posture and, for the first time, highlighted ‘information warfare’ in the ‘cognitive domain, including the spread of disinformation’ as a growing challenge. The Strategy, however, does not yet adopt the EU’s FIMI terminology. It lists plans to strengthen analytical capabilities including the introduction of AI‑enabled systems by around 2027.

In response, Japan’s Ministry of Foreign Affairs (MOFA) is enhancing its information‑gathering and analytical functions to monitor ‘information warfare’ and to inform public communications that contest hostile narratives. Its dedicated webpage, ‘The Responses to Information Manipulation, including Spread of Disinformation’, also references ‘foreign information manipulation’ and highlights Japan’s engagement in G7 and other frameworks, such as the 2023 US-Japan memorandum on countering foreign information manipulation. The Ministry of Defence (MOD) treats disinformation as part of the threat environment, building analytical and AI‑supported warning systems and feeding verified information into government‑wide communications as part of a broader ‘cognitive‑domain’ defence posture. Other governmental actors, such as the Ministry of Internal Affairs and Communications, the Digital Agency and the Information-Technology Promotion Agency, approach information threats primarily from the perspectives of technology, platform‑governance and cybersecurity, with disinformation recognised but not fully mainstreamed.

Japan’s information space and FIMI threats

Due to the centrality for Japan of the FOIP vision in its foreign and security policy, it has become a prime target for actors seeking to undermine the liberal international order anchored on US-led security architectures. Japan’s position as a key US ally in East Asia and the Indo‑Pacific, and its role as a G7 member whose diplomatic and strategic influence remains significant adds to its value as a target.

Existing authoritative studies tended to portray Japan’s information space as highly insular and resilient, despite the history of intensive Chinese overt and covert efforts to secure pro‑Chinese outcomes through engagement in Japan’s politics, business, media and society. Yet Japan may be quickly losing the perceived insularity that long shielded it from information manipulation, when combined with the on-going trend towards the segmentation of Japanese society along lines relating to socio-economic or migration issues, for instance. Consistent with trends in the broader Indo-Pacific, an increasing number of studies indeed point to existing Chinese online activities in Japanese information space.

A recently-published innovative study employing event-based open-source intelligence (OSINT) data analysis details the designs of both Russian and Chinese information operations in Japanese information space, and further, how they interact with one another. It shows that Russian or Chinese state-sponsored content can circulate in the Japanese language and spread quickly in the country’s media eco-system. Although their campaigns seemed uncoordinated at the time of the research, considering the fact that the timing of their campaign intensity consistently differed across the diplomatic events monitored, the content could create a ‘net-information effect’, as they share the similar strategic objective of undermining the Western security architecture in which Japan is a central anchor. Russian state media and affiliated accounts repeatedly portray Japan as a ‘pawn of the West/US’, question the value of the US-Japan alliance and attack Japan’s reputation as a democratic, rules‑based actor, while attempting to reframe perceptions of the Ukraine war and nuclear risk, and by attacking the legitimacy of critiques of Russian aggression. Chinese narratives employ a different framing, often portraying the FOIP as US‑led containment of China, and emphasising China’s constructive role via the Belt and Road Initiative and ‘economic cooperation’ with the Global South and ASEAN, while opportunistically leveraging controversies (most prominently, the Fukushima ALPS incident). Although uncoordinated, Chinese and Russian campaigns converge in portraying Japan as subordinate to the Western powers, discrediting the FOIP and Japan’s alliance relations.

Yet to treat the documented presence of Russian or Chinese narratives as evidence of a substantial impact on Japanese FOIP’s viability or credibility would be short-sighted, as data that indicates the presence of manipulation does not necessarily explain how it impacts the target audience. Separate investigations and methods would be required to understand their precise impact on target audiences, as manipulations often occur without necessarily shifting public opinion or elite decision‑making. This conflation matters for policy, indicating a need for a more behaviourally informed FIMI analysis.

Japan’s strategic communications and modalities for counter‑disinformation and FIMI

Japan does not face the same intensity of information manipulation as front‑line European states, but the main point to acknowledge is that the global struggle for influence vectored through the information domain does reach the Indo-Pacific, including Japan. The North Atlantic and the Indo-Pacific are thus inherently linked.

In diplomacy, Japan anchors its narratives in FOIP discourses and thus proactively frames its regional and global roles, emphasising inclusivity and support for international law. By doing so, it seeks to pre‑empt adversarial and anti-status-quo narratives that attempt to undermine/delegitimatise the FOIP. This is a form of anticipatory strategic communications: rather than responding to each hostile narrative individually, Japan articulates a consistent story that can point to a long-term vision that explains what Japan stands for.

Japan’s response to on-going FIMI attempts is primarily focused on advancing its own analytical capabilities, including open-source intelligence, an issue certain to be featured in the forthcoming review of Japan’s intelligence communities under the current Sanae Takaichi cabinet. Japanese policymakers and especially industry‑based researchers have increasingly turned to OSINT methodologies –from social‑media monitoring to content and network analysis– to document specific foreign campaigns. These efforts could help move domestic debates beyond generic claims that ‘social media can spread disinformation’, to identifying concrete cases, behaviours and tactics, which could then inform public policy. The quality of these analyses, however, remains uneven, and most such work, where it exists, remains outside the public view, which might create issues with transparency.

There are obstacles to publicising such analyses of FIMI, caused by diplomatic and political sensitivities surrounding the formal public attribution of specific state‑linked information actors, aside from the fact that attribution is often technically more demanding. Public attributions require political will, and Japan to date has preferred to deal with specific cases of disinformation or FIMI through the existing bilateral/diplomatic/political context, rather than resorting to a categorical policy of exposure directed against specific actors.

Cooperatively, Japan works through alliance and minilateral frameworks –the G7, EU-Japan dialogues and bilateral cooperation with the US (before the Trump Administration)– to share assessments and, in some cases, discuss responses. Domestic legal and normative constraints, including strong protections for freedom of expression and the relatively slow development of regulatory frameworks, limit the scope for the more robust content‑governance and content‑moderation measures seen in Europe under the Digital Services Act. Given the sensitivity regarding public attribution, international collaboration including attribution of FIMI would be carried out on a case-by-case basis.

Prospects and obstacles for Japan-Europe cooperation against FIMI

In light of the on-going information manipulation active in both Europe and the Indo-Pacific, the logic for closer Japan-Europe cooperation against FIMI is strong. Both actors are liberal democracies whose security and prosperity depend on open, rules‑based systems, a need that is reflected in their respective Indo-Pacific strategies. Indeed, in 2024 the EU-Japan Security and Defence Partnership elevated ‘hybrid threats, including foreign information manipulation and interference (FIMI)’ to a core area of cooperation, committing both sides to share threat assessments and to explore operational coordination on FIMI, commitments that were subsequently reaffirmed in the first EU-Japan Strategic Dialogue held in Tokyo in November 2024.

Cooperation could take three forms, with various benefits. First, even more coordinated narratives about the rule of-law based order could be crafted and promoted in a strategic manner by both Europe and Japan that would be most significant as a projection of a common vision vis-à-vis authoritarian challengers. Such collaboration would be grounded on Japan’s and Europe’s long-term strategic communications.

Secondly, shared analytical standards and methods would advance technical cooperation. Joint research and academic-policy networks could help Japan and Europe develop more rigorous, comparable ways of assessing FIMI. The difficulty in this case is the cost associated with such endeavours, especially given the high cost of certain data. Such joint research could investigate how to distinguish between FIMI presence and impact, identifying when FIMI campaigns reach thresholds that merit policy response, among others.

Third, technology is now a critical axis of the FIMI debate and should feature more explicitly in future EU-Japan cooperation. Existing frameworks such as the EU-Japan Digital Partnership on digital governance and AI, including work on generative AI, could be used to give practical effect to cooperation in the FIMI domain, with the Hiroshima AI Process providing an additional political anchor. Since these technologies can help efforts to counter FIMI, they offer potential entry points for gradually deepening Europe-Japan collaboration on FIMI, for example by aligning principles and sharing methodologies.

Fourth, given that both Europe and Japan are large and experienced aid donors, support for third‑country information resilience could be enhanced in a coordinated manner, or even jointly managed. Japan and Europe both run capacity‑building programmes in the Indo‑Pacific and beyond. Coordinated efforts to support independent journalism, assist election management, share analysis and promote the responsible adoption of new technologies could significantly strengthen local resilience against FIMI.

Given that adversaries persistently combine information manipulation with economic and military levers, it is difficult to see how uncoordinated, siloed responses by Japan and Europe could suffice over the long term.

The same geopolitical environment that needs such responses, however, may also create obstacles to cooperation. Europe’s immediate threat environment is undoubtedly dominated by Russia and the war in Ukraine, with FIMI viewed through the lens of existential conflict on its eastern flank. Japan also supports Ukraine through various schemes and support groups with Europe/NATO, beyond coordinating policies with G7 member countries and institutions. However, for Japan and the broader Indo-Pacific, to a varying degree and in different ways, China is an immediate and long-term strategic challenge (and, for some, an opportunity); hence broader foreign and security policy coordination, including geoeconomic policies vis-à-vis China, tends to matter more than focus on information resilience alone. Ultimately, Europe and Japan would need to find a mutually compatible way of understanding where FIMI fits into their own strategic priorities and then coordinate a collaborative approach.

Differences in responses to US intransigence and unpredictability also matter. Many European policymakers have responded to shifts in US policy by calling for ‘strategic autonomy’, including in defence and information resilience, to a great extent pushed also by public opinion in their own country. Japan, and other US allies in the Indo-Pacific, whose security remains heavily dependent on the US, not to mention the provision of extended deterrence, has far less room for manoeuvre, although Japan, too, has pursued vigorously middle-power associations and minilaterals, most notably the Quad, while seeking to reduce asymmetrical dependence in certain supply chains.

A third cluster of obstacles concerns technical capabilities and intelligence culture. Several European states and EU institutions have developed relatively robust FIMI monitoring structures, including dedicated task forces, early warning mechanisms and regulatory initiatives affecting digital platforms. They have also engaged in high‑profile public attribution of foreign information campaigns. Japan’s information collection and analysis, including by intelligence institutions, are more discreet, and historical experience would indicate more stove-piped information collection and analysis by several engaged agencies. While OSINT‑based research is expanding, formal mechanisms to translate findings into policy –let alone engage in public attribution, as noted above– remain relatively underdeveloped and context-dependent.

From an EU-Japan cooperation perspective, these differences raise practical questions, including to what extent and at what level(s) FIMI analysis, which would by nature include sensitive information, can be shared. It would be desirable to agree upon workable modalities for sharing information, if both parties are to develop common situational awareness, or coordinate any responses to FIMI attacks or synchronise public messages on specific FIMI cases.

Conclusions

Japan’s FOIP vision demonstrates how strategic communications and geopolitics intersect in the Indo‑Pacific: the vision of the Indo-Pacific and the FOIP were devised to shape the regional and global order, to expand the group of like-minded partners and shape behaviour and expectations of others, and to create space for enabling liberal values and principles to thrive. Because the FOIP as strategic communications and geopolitics in action is central to Japan’s posture, it offers a uniquely revealing lens for viewing the dynamics of FIMI or disinformation.

Japan’s information environment, with its own distinctive political/social/economic cleavages, presents both strengths and vulnerabilities. OSINT‑based research has begun to map how foreign actors target the FOIP and related discourses, but it also reveals a pervasive tendency to conflate the mere presence of FIMI attempts with impact on societal perceptions in the target state(s). Addressing this conceptual gap is essential if counter‑FIMI policies are to be effective.

For Japan and Europe, cooperation in countering FIMI is clearly warranted. Their interest in preserving an open, rules‑based world order and stable information environments are closely aligned, and their Indo‑Pacific strategies already overlap in important respects. Yet cooperation will be constrained by geopolitics and divergent strategic priorities, including responses to the rise of China and evolving US policies, differing technical capacities and distinct information/intelligence-gathering cultures. These constraints suggest that Japan-Europe collaboration will be most productive in areas such as shared analysis, conceptual alignment and coordinated strategic communications, rather than in fully harmonised counter-FIMI operational responses.

In a world where coercion and information manipulation are becoming normalised, the instruments of statecraft and middle‑power coordination of this kind will not, by themselves, resolve all our strategic challenges. But they can help ensure that Japan and Europe retain and strengthen agency in shaping how that challenge is understood and addressed, so that we are not merely objects of other powers’ narratives, but co‑authors of a more resilient security order.

[1] Part of this work was supported by JSPS KAKENHI Grant Number JP23K25483.

La entrada Japan-Europe cooperation against foreign information manipulation and interference: prospects and challenges se publicó primero en Elcano Royal Institute.

Society is facing very complex challenges where the diversity of knowledge systems is a key foundation for a deeper understanding that should lead to more equitable and sustainable outcomes because it can help to break down reductionist silos and uncover hidden interdependencies to foster more sustainable, equitable solutions.

Gender is an integral element of the Paris agreement with the Gender Action Plan adopted at COP30 in Belem after 25 years of negotiation since 2001. Therefore, a gender tracker on the intergovernmental panel on climate change (IPCC) itself is proof of coherence. There has been a rise from a 2%-to-8% presence of female authors across the different working groups in the first IPCC report in the 1990s, to 33%-to-40% in the latest AR6 report published between 2022 and 2023, and finally to the current recently selected female authors in AR7, which now reach 46%. There is even better news if looking at the current IPCC Cities and Climate change report –currently under review–, which has slightly surpassed parity, a first in the IPCC’s 37-year history, to a majority-female authorship (51 out of 97 authors).

The MedEcc, a scientific body spanning the north and south Mediterranean led by the Union for the Mediterranean (UfM), the United Nations Environment Programme/Mediterranean Action Plan (UNEP/MAP) and Plan Bleu, has an equal number of female and male authors working on the MAR2 report currently under preparation. The latter will document the evidence on scientific knowledge of Mediterranean climate and environmental challenges. But it will also extend the focus to social sciences in order to also help consolidate the scientific evidence assessments on the urgent challenges in a well-recognised hotspot region –not just in political terms, but also due to climatic and environmental drivers–, with the object of strengthening environmental diplomacy and climate governance policies in these turbulent times.

Key characteristics of the world’s current problems –such as the environmental and climate crisis– are their complexity and the importance of supporting cultural change rather than boosting cultural wars. Society is facing very complex challenges where the diversity of knowledge systems is a key foundation for a deeper understanding that should lead to more equitable and sustainable outcomes because it can help to break down reductionist silos and uncover hidden interdependencies to foster more sustainable, equitable solutions.

In the case of women and science, the latter has to be more inclusive. Arecent workshop held by the IPCC at one of the oldest and largest meteorological institutes in the world, at the University of Reading –founded by a couple of meteorologists, female and male–, reflected on the importance for science to be open to diverse knowledge systems: indigenous, local and practice based. At the same time, it highlighted the revolution that digital technologies represent as regards methods of assessment for scientific evidence in view of the exponential growth of information. A key element was how science itself must reflect and consider the ethical principles and practical operation of AI use in scientific assessments and data collection.

The openness to other ways of knowing should span not only space but also time. Inclusivity must be seen in terms of what is known as the ‘Seventh Generation’ Principle, an Indigenous philosophy rooted in the Haudenosaunee Confederacy’s Great Law of Peace, which holds that decisions made today should be considered on the basis of their impact over the next seven generations. Thus, it is vital to emphasise long-term sustainability, environmental stewardship and the well-being of future descendants. This underlines the importance of intergenerational justice, allowing both youth and the elderly to offer new ideas in addition to valuing experience.

The substantive role of women in science, technology and economic development at large is well documented. As an example, 22 March will see the celebration of the 2026 Water Day, which this year has chosen water and gender as its theme: ‘where water flows, equality flows’. As highlighted with data and evidence, women and girls are ‘disproportionately affected by water-related challenges due to entrenched gender roles, inadequate infrastructure, underrepresentation, limited funding, restrictive social norms and systemic inequalities’. There are currently a number of initiatives; first, a Women and Water Group led by the Dutch embassy in Spain to help mobilise professional women, from academia to business around water and its value, particularly with regard to the next 2026 UN Water conference to be held at the end of the year. Secondly, an emergent female-led group around Cenas del Agua, which over two years has organically grown from nine to 170 women to offer support, mentorship and networking opportunities, especially for young women professionals, as well to celebrate the appointment of women in key decision-making positions in the water sector or as directors in technical universities. Finally, women in industry, which will reflect on the role of women in the water sector event to celebrate the world water day hosted by the CEOE and DAQUAS, and on future challenges and opportunities.

More formally, middle powers can therefore also lead –even in turbulent times– on the protection of transformative, rights-based approaches where women have an equal voice, leadership and opportunities in (water) decision-making, making water a force for a healthier, more prosperous, gender-equal future that will benefit all. This example can be replicated in other fields.

As with UNESCO, ‘culture and science’ can be included under the same umbrella. It is a cultural change that will drive a quiet revolution for inclusive science. Equity and access to all kinds of knowledge are at the core to fight disinformation and protect information integrity through critical thinking that leaves no one behind. This especially affects young men who feel excluded as shown in recent statistics, as they turn to extreme ideologies that further polarise and divide, fed by algorithms that oversimplify complex matters. Circumstances are not simple, yet simple messages prevail, and the antidote requires the diversity of visions and perspectives that science has learnt to respect and protect rooted in the scientific method. In a search for impartiality, science has now evolved to acknowledge its own position in a post-normal scientific world. Science itself must be inclusive of all types of knowledge and cultures.

In the context of polarisation and power politics it is even more important to protect and respect the scientific independence of researchers, including female ones, when speaking truth to power, when science in post-COVID times is under attack, in fields such as, eg, health and climate change. It is therefore even more imperative and to be commended and encouraged that middle powers step forward, in this case led by female diplomats to create safe and inclusive spaces for all to benefit and celebrate a culture of scientific enquiry that is inclusive of all types of knowledge and also of controversy itself, yet protected from structural power games.

Women scientists are well represented in RAICEX, a strong Spanish scientific community spread across the world and supported by the country’s embassies, celebrating, among other issues, 100 female scientists in the world of AI and ethics through dialogues. A White Paper on gender policies in Science and academia supported by the Fundación Areces and RAICEX has documented ‘the leaky pipe’, a comparative study that has systematically compared and documented the evidence across countries to identify structural barriers in female scientific careers. The IPCC is a positive sign that equity is now within our reach, although other stalwarts of scientific recognition such as Nobel Prizes still have some catching up to do: only 67 of over 1,000 Nobel Prize recipients –or 6.6%– are women (with Marie Curie one of five laureates to have won a Nobel Prize twice).

Figure 1. Nobel Prizes awarded to women, 1901-2025

However, things are changing, as there are now female Ministers of Ecological Transition, female heads of Climate Change Offices and of Climate Delegations leading complex and tough negotiations at the UNFCCC conferences. This shows how great strides have been made, as they are when rules are applied and spaces created, for instance, in the recent COP30 Spanish pavilion that highlighted women’s leadership through specialised panels and a strong commitment to gender parity among its speakers (a 54% participation rate). Equally important are the funding streams such as NEOTEC and prizes such as the L’Oréal-UNESCO For Women in Science International Awards that honour five outstanding women researchers annually –one from each global region– and that has now supported 4,700 women worldwide, seven of whom have received a Nobel Prize. All these specific initiatives celebrate and encourage female-led companies and projects, with evidence showing that this brings fresh perspectives and insights into the resolution of real-life complex challenges. It is important to acknowledge the complex geopolitical landscape that can seem to detract from the urgency of protecting and accelerating science and gender achievements: ‘Since wars begin in the minds of men, it is in the minds of men that the defences of peace must be constructed’. The quote dates back to 1950, more than 75 years ago, and appears in Frederick S. Dunn’s War and the Minds of Men, which analyses the psychology behind international conflicts and the importance of communication to address fear. Furthermore, it is the first sentence of the Preamble to UNESCO’s Constitution, regarding the diversity of mankind. Translated into nine languages, it is carved in stone on a monument erected at UNESCO’s headquarters in Paris.

Figure 2. Stone placard on the Preamble of UNESCO’s constitution

UNESCO’s doctrine was built on the basis of this axiom, which presupposes that wars are caused by ideas. It highlights that peace must be built through education, culture and mutual understanding rather than solely through political or economic agreements. The ‘intellectual and moral solidarity of mankind’ can now be reframed as the ‘intellectual and moral solidarity of humankind’. Cognizant of the current push towards defence and security, it is vital to protect what we seek to protect through these tools and not get lost or sideline the value of culture and diversity in the immediate fray.

To conclude, it would be appropriate to highlight some ideas: (a) the pivotal role of scientific diplomacy in championing women and diversity in science amidst current pressures; (b) the need for inclusive science that incorporates diverse knowledge systems (including Indigenous and local knowledge) to address complex challenges such as the climate crisis; (c) the importance of protecting scientific independence and promoting women’s leadership in science, technology and policy; and (d) protect and promote the intellectual and moral solidarity of humankind as the foundation for peace and sustainable solutions.

La entrada Science and women and the science of cultural change over cultural wars se publicó primero en Elcano Royal Institute.

• Vaca Muerta already produces more than half of Argentina’s oil and natural gas, being the most important case of non-conventional hydrocarbon extraction using hydraulic fracturing and horizontal drilling (fracking) outside the US.
• The Vaca Muerta project challenges various myths exclusively linking the success of fracking to the US context. If the Argentine case could serve as a benchmark and fracking could spread internationally, it would have geopolitical, environmental and climate implications of the highest order.
• However, replicating the Argentine experience in other geographical settings faces major barriers linked to the political environment, the business structure and the social licence to operate, all of which tend to suggest that the Argentine case may be more of an exception than a benchmark.

Analysis

Vaca Muerta is now a reality and currently produces more than half of Argentina’s oil and natural gas, being the most prominent case of non-conventional hydrocarbon extraction using hydraulic fracturing and horizontal perforation (fracking)[1] outside the US. The future of Vaca Muerta is especially promising: it is predicted that, towards the end of the decade, it will enable Argentina to become a net exporter of oil and gas, with the potential to generate income of up to US$25.4 billion a year, a figure comparable to the amount generated by the country’s agricultural exports.

How has Argentina managed to replicate the US’s success in shale? To put it differently, what are the variables that account for Argentina’s success, in contrast to the failure of other countries that have previously tried fracking?

Understanding the Argentine case is important for two reasons. First, non-conventional reserves are a ‘frontier extractive industry’ with a significant potential for bolstering the security of supplies for producer countries, increasing access to energy in developing countries and changing the balances of power in the geopolitics of energy. Secondly, their extraction incurs major environmental and social risks. Shale[2] is often described as a ‘carbon bomb’ for two fundamental reasons: because of the volume of greenhouse gas emissions associated with the hydrocarbon deposits capable of being extracted through fracking; and because of the emissions, especially methane, that are created over the whole course of the production process. Moreover, in the absence of a proper regulatory framework, hydraulic fracturing also has a major environmental impact linked to the contamination of groundwater[3] and management of the waste generated by the activity.

This analysis starts by considering the factors that account for the success of Vaca Muerta in Argentina: propitious geology, a favourable political narrative, consistent regulatory support and, most importantly, the existence of a well-established social licence to operate. The paper concludes by considering the possibility of replicating the experience elsewhere, by means of three case studies in Colombia, Mexico and Algeria, where the debate around fracking is highly contentious and the hydrocarbon industry is similar to Argentina’s: century-old oil industries, but a decline in conventional output, concern about the security of supplies and proved reserves of non-conventional oil and gas.

From the exceptional nature of the US to the success of Vaca Muerta

The development of Vaca Muerta challenges various myths associated with the supposedly exceptional nature of the US, according to which it was practically impossible to replicate without its business ecosystem, a decentralised, liberalised and deregulated oil industry as well as political stability and, above all, a bedrock ownership regime in which a landowner is also the owner of the underground mineral resources.

The success of fracking in Argentina is particularly significant because it has succeeded in establishing a capital-intensive sector in an adverse macroeconomic environment, beset by recurring exchange-rate crises, high inflation, price controls and restrictions on the free movement of capital. Nor has the political environment been conducive to investment, especially following the 2012 nationalisation of the largest company operating in the sector, Repsol-YPF, and an alternating succession of governments from diametrically opposed wings of the political spectrum: Fernández de Kirchner, Macri, Fernández and now Milei. Moreover, while Argentina is a country with a long tradition of mining and to a lesser extent oil production, such activities have not been immune from vocal public opposition. For instance, the 2018 tendering process for offshore hydrocarbon exploration and production unleashed vociferous campaigns, known as the Atlanticazo, in various coastal cities.

Paradoxically, despite the fact that in other countries fracking is viewed as an extreme extractive technique that has generated intense opposition among environmentalists, opposition has been extremely muted in Argentina. This has helped the supporters of the oil industry, including the state-owned YPF, to secure the invariably difficult social licence to operate. As shown in Figure 1, the output of non-conventional oil and gas (shale andtight oil) has risen steadily in recent years, reversing the natural decline of conventional production. Forecasts for 2030, based on YPF projections, envisage in excess of a million barrels of crude oil a day and 7 billion cubic metres (bcm) of gas per month.

Figure 1. Output of oil and gas in Argentina, 2009-24

Geology matters, but is not sufficient

Although geological reserves of shale gas and oil are more evenly distributed than those of conventional hydrocarbons, the Argentine deposit located at Vaca Muerta is considered one of the best in the world both in quantitative and qualitative terms. Notable among its chief assets are its significant thickness (150-300 metres), optimal depth for non-conventional exploitation (2,500-3,500 metres) and a vast surface area of approximately 30,000 km², equivalent to the size of Belgium.

The conditions at the site are not perfect, however. Apart from anything else, Vaca Muerta is a logistical challenge. It is located in a relatively remote part of Neuquén province, a long way from the main clusters of energy consumption, devoid of a nearby port and with limited infrastructure for transporting hydrocarbons. The region’s arid climate hinders access to the water resources needed for hydraulic fracturing and its use of water puts it at odds with other consumers, such as irrigation for fruit growing.

Figure 2. Map of Vaca Muerta and the associated infrastructure under construction: gas and oil pipelines and ports

Although geology is a necessary condition for the exploitation of shale, it is not sufficient to guarantee success. The specialist literature is unanimous in viewing the above-ground risks –in other words, the risks related to the political, regulatory and economic context– as being much more decisive than the below-ground risks, related to the geological quality of the deposit. The variable that accounts for the success or failure of the shale thus resides more in the institutional, social and economic conditions than in the characteristics to be found underground. As shown in Figure 3, shalegas resources are relatively evenly distributed in geographical terms; the bulk of production, however, takes place in the US, Canada and, more recently, Argentina and China. One of the most instructive cases is the Eagle Ford basin, running from Texas to north-eastern Mexico, where it is known as the Cuenca de Burgos; whereas on the US side the basin produces non-conventional oil and gas using fracking, on the Mexican side of the border it remains virtually inactive.

Figure 3. Map of basins with the potential to produce shale oil and gas

The importance of narratives and the political discourse around shale

Around the time that Repsol-YPF announced the discovery of enormous oil and natural gas reserves at Loma La Lata, in Vaca Muerta, on 7 November 2011, Argentina was embroiled in an unprecedented energy crisis. The decline in output since 2004 (see Figure 4) had obliged the country to unilaterally suspend its exports to Chile, in breach of existing contracts. Halting supplies to its neighbour unleashed a diplomatic crisis and was a watershed moment in the energy integration of the Southern Cone. To satisfy the country’s energy needs, Argentina initially resorted to importing gas from Bolivia and later liquefied natural gas (LNG). The precariousness of supplies was such that, between 2004 and 2011, during the coldest winter months, Néstor Kirchner’s government was forced to prioritise household consumption of natural gas, rationing its use by industry and transport, thereby incurring major economic and political costs.

Repsol-YPF’s discovery of Vaca Muerta was presented as a transformative opportunity, described as a new ‘El Dorado’ for Argentina.[4] Given that Neuquén was already well-established as a hub for extracting conventional oil and gas, the national government and provincial authorities gave an enthusiastic welcome to Vaca Muerta as a means of restoring energy self-sufficiency, recovering waning tax revenues and reversing the deficit in Argentina’s energy balance of trade.

The discovery was made amid a context of pronounced regional nationalism related to natural resources. This was especially evident in Bolivia with the nationalisation of hydrocarbons in 2006 overseen by Evo Morales; that same year in Venezuela, with the renegotiation of oil contracts under the government of Hugo Chávez; and in Ecuador, with the reform of oil contracts in 2010 during Rafael Correa’s presidency.

Argentina joined this regional movement in 2012 with the approval of Law 26,741, which expropriated 51% of YPF SA and Repsol YPF Gas SA from the Spanish-Argentine multinational Repsol-YPF. Cristina Fernández de Kirchner’s government justified this measure by alleging a lack of investment and the prioritisation of foreign shareholders’ interests, particularly in the payment of dividends, to the detriment of the country’s energy needs. A majority of legislators (including the opposition parties)[5] voted in favour of the bill, which as well as the nationalisation sought to impose regulations on fracking. This chronology of discovery and subsequent nationalisation created an unusual political consensus in Argentina, a country that the Edelman Trust Barometer consistently classifies as one of the most politically polarised in the world.

An open and competitive oil market

Despite the nationalist rhetoric and renationalisation of 2012, YPF retained the operating structure of a private business, preserving its autonomy, its corporate governance arrangements and its stock exchange listing as a limited company. This independence enabled it to retain a good deal of its technical know-how and the corporate culture that had been nurtured under Repsol ownership, thereby avoiding the drift that regional counterparts such as PDVSA underwent. Cristina Fernández de Kirchner’s government, despite its political orientation, chose to maintain the involvement of private actors in Argentina’s energy sector, including the minority stakeholders in YPF.

Acknowledging the technical and financial challenges implicit in non-conventional extraction, the government encouraged partnerships between YPF and foreign oil companies. The relative openness of Argentina’s energy sector to foreign capital, in contrast to the wave of nationalisations and contract renegotiations that swept through other countries in the region, enabled the striking of key agreements, such as the one signed between YPF and Chevron.[6] This partnership constituted a milestone in the restoration of foreign investment in the sector just a few months after the expropriation of Repsol. It also triggered vociferous political opposition, however, not only because of the secrecy that shrouded its contents but also the fact that Chevron was embroiled in a lawsuit with Rafael Correa’s government in Ecuador, one of Argentina’s main regional allies at the time.[7]

YPF’s role as a state actor was accompanied by the presence of oil multinationals with capital and experience in US shale (Chevron, ExxonMobil, Shell and TotalEnergies), and by a flourishing ecosystem of Argentine companies (Vista, Pan American Energy, Pluspetrol and Tecpetrol) that started to operate in all stages of the upstream[8] process, demonstrating remarkable technical expertise.

This configuration of the oil sector gave rise to a market that soon started to replicate the decentralisation, dynamism and atomisation characteristic of US enterprise, where innovation and expertise are inducive to an ongoing process of learning about the geological resources. Such a type of ecosystem has a relatively low prevalence in oil-producing countries, which tend to exhibit rigid and highly centralised structures, whether revolving around a state enterprise that operates as a monopoly or by means of joint ventures with the state holding a majority stake.

Indeed, according to Rystad Energy, thanks to the positive features of the geological resource, access to cheap labour and the expertise acquired by Vaca Muerta operators, the average cost of production in Argentina is less than that of the main US shalebasins. The departure of major foreign investors, especially Total Energies and ExxonMobil since 2024, has given rise to an ‘Argentinification’ process of Vaca Muerta operators, proof of the expertise acquired by the local ecosystem and its emancipation from the US experience.

Constant and broad political consensus built on pragmatism

After the take-over of YPF in 2012, a range of measures were implemented to encourage the development of Vaca Muerta. These included Decree 929/2013, which offered incentives to major investors in non-conventional hydrocarbons, including fiscal stability for 15 years and, in the context of the so-called cepo cambiario, or foreign exchange clamp, unrestricted access to 20% of the currency obtained from exports related to the project. At the same time, minimum gas production prices were established at the wellhead, higher than those of the domestic market, with the aim of incentivising investment. YPF signed various key agreements with foreign companies, such as Chevron (in 2013), Petronas, Wintershall and Shell, which participated in various blocks by means of technical and financial partnership arrangements.

Under the presidency of Mauricio Macri (2015-19), and despite a more pro-market approach to energy affairs, the political support for Vaca Muerta remained constant. His administration retained the production subsidies, guaranteeing attractive prices at the wellhead, while gradually reducing those geared towards demand. During his term in office, gas exports to Chile were reinstated, more than a decade after supplies were suspended, and the tariffs levied on imports of the machinery required for oil production were substantially reduced.

The government of Alberto Fernández (2019-23) continued support for Vaca Muerta as a strategic cornerstone of the sector, albeit influenced by macroeconomic instability, exchange rate restrictions and fluctuations in the price of hydrocarbons on the international markets. Despite a more interventionist rhetoric, the executive preserved agreements with foreign companies and the public-private partnership approach. It also maintained the production stimulation programmes for natural gas and oil, such as the Plan Gas.Ar, which guaranteed producers minimum prices in exchange for investment commitments. Fernández inaugurated the first phase of the Néstor Kirchner gas pipeline,[9] a key project for increasing the ability to transport gas away from Vaca Muerta, and made progress on extending the Oldelval and Trasandino oil pipelines.

Lastly, Milei’s government (in office since 2023) enacted the Major Investments Incentive Regime (RIGI), which offers regulatory stability for 30 years, tax breaks, currency benefits and other stimuli to attract investments into infrastructure and energy. Moreover, it gives producers freedom to export provided that they first satisfy local demand, thereby opening up the Argentine oil industry to the international market after years of restrictions.

Under the auspices of the RIGI, work has started on building the Vaca Muerta South oil pipeline and the final investment decision has been taken to construct two floating liquefaction plants to export LNG from 2027. Under Milei’s presidency, and having abandoned its initial privatisation plans, YPF has set out its 2025-29 strategic plan with three key objectives: focusing investments on Vaca Muerta, becoming the largest shale producer in the world outside the US and leading the development of the infrastructure needed to export Argentina’s hydrocarbons.

At one of the moments of greatest political polarisation, support for Vaca Muerta has remained constant for more than 15 years and has rested on three pillars: private investment complemented by the state-owned YPF; production subsidies with wellhead prices above the domestic market price; and construction of infrastructure, including international interconnections, using public-private partnership schemes.

A social licence to operate based on local support

Unlike large-scale mining, which has faced vociferous resistance from civil society organisations, such as the Union of Citizen Assemblies, the extraction of hydrocarbons from Neuquén province, the epicentre of Vaca Muerta, has long enjoyed remarkable social legitimacy, having been part of the local economic fabric since the advent of the 20^th century. One of the decisive factors in this widespread acceptance of shale has been the role played by YPF, which ever since it was founded has played a key part in the development of the territory, as a symbol of national pride, as an instrument of population settlement and in extending the state’s presence to particularly remote parts of Argentina.[10] The renationalisation of the company in 2012 coincided with the expansion of fracking and both processes were framed within a narrative of energy sovereignty and economic revival in the region.

The institutional framework has been decisive in the consolidation of this consensus. The 1994 constitutional reform granted the provinces ownership of below-ground resources, enabling them to make a direct claim on the royalties generated by production. Such fiscal decentralisation aligned provisional governments’ interests with fracking, given that the income emanating from oil and gas is essential to sustaining their budgets, funding public services and investing in infrastructure. The Short Law of 2006 expanded this autonomy even further by granting provinces powers to negotiate and extend exploration and operating contracts. Such an institutional configuration has created a clear incentive for provincial governments to operate as active promotors of Vaca Muerta, and they have even put pressure on the national executive to maintain policies that aid hydrocarbon production, sometimes turning a blind eye to environmental warnings and concerns regarding the cost-benefit ratio.

This decentralised model has also facilitated the building of the infrastructure needed to transport the Vaca Muerta output, construction of which is as socially sensitive as the production activity itself. The province of Río Negro, from where a large part of the crude oil produced in Neuquén will be exported once the Vaca Muerta South oil pipeline and the Punta Colorada terminal have been constructed, is a good case in point. In 1999 Río Negro passed a pioneering law that banned hydrocarbon-related activities in the Gulf of San Matías. In 2022, however, by an overwhelming majority the province approved a law that included exceptions for the development of infrastructure related to the transport and storage of hydrocarbons. The change of heart can be attributed mainly to an offer made by the consortium in charge of constructing the pipeline: more than US$1 billion by way of taxes and royalties over 13 years which will end up directly funding a province of 750,000 inhabitants.

Case studies: Mexico, Colombia and Algeria

Analysis of the cases of Mexico, Colombia and Algeria enables a deeper understanding of the variables that have made Argentina an international exception in the successful exploitation of non-conventional oil and gas resources. To address this question, it is first worth turning attention to Mexico, a country with a longstanding record of oil production and promising geological prospects, which approved an ambitious constitutional reform aimed at liberalising its energy sector and emulating, among other things, US success with fracking. Colombia illustrates the difficulties of making headway in shale development without obtaining a social licence to operate, despite having proved reserves, an approving political elite (until Petro was elected) and a technically competent business sector. Lastly, there is the case of Algeria, another longstanding producer of hydrocarbons, highly dependent on its energy-derived income and with vast reserves of non-conventional gas, extraction of which is viewed as a strategic necessity given the gradual depletion of its conventional reserves.

Mexico: energy policy reform but no social licence or political consensus

The development of fracking in Mexico was structured around the 2013 Energy Reform instigated by Peña Nieto’s government. This reform, which required a constitutional change, put an end to the PEMEX monopoly and opened the sector up to private investment, both domestic and foreign, in oil and gas exploration and production activities. One of the justifications of the reform was the need to revive a declining sector by dint of private capital in order to tap into, among others, the non-conventional resources that its northern neighbour was producing with such success. The development of shalein Mexico was justified on the grounds of energy security, amid growing dependency on US gas, as well as on fiscal grounds, given that PEMEX’s oil output was undergoing rapid decline due to its ageing wells, jeopardising its annual contribution to state coffers.

The 2013 Energy Reform put an end to almost a century of oil-centred nationalism and unleashed a vociferous social movement. In particular, the response to the government’s commitment to shale was the creation of the Mexican Anti-Fracking Alliance, a platform made up of more than 40 national and regional organisations. Over time, this coalition managed to transform fracking from a technical and peripheral issue into a symbol of environmental and political discontent with the unpopular Peña Nieto administration. Specifically, the Mexican Anti-Fracking Alliance managed to consolidate itself in those Mexican states where fracking had the greatest potential. Unlike in Argentina, where the provinces exercise control over their underground resources and stand to benefit directly from their extraction, the states and municipalities in Mexico barely receive any income from the production of hydrocarbons, given that it is the federal government that manages and redistributes oil income through fiscal transfers. This arrangement creates an imbalance in the distribution of costs and benefits: local communities are on the receiving end of environmental and social impacts, whereas the economic gains are funnelled into the federal level.

The election of Andrés Manuel López Obrador in 2018 represented a U-turn in energy policy and, aided by his majority in Congress, he reversed most of the energy reforms, including those aimed at attracting private investment and galvanising the energy sector. Although López Obrador had repeatedly expressed his support for fossil fuels, he took a firm stance against fracking, which he linked directly with his predecessor and attempts by private capital to undermine Mexico’s ‘energy sovereignty’. While López Obrador did not carry out his promise and never banned fracking, he did polarise public perception of the technique and paralyse its development.

The election of Claudia Sheinbaum heralded an unexpected shift in the policy on fracking. PEMEX avoids using the term ‘fracking’ in its 2025-2035 Strategic Plan, and replaces it with expressions such as ‘sites of complex geology’, ‘new extraction systems’ and ‘non-conventional plays’. It also includes references to the experiences of the US and Argentina, to the development of technologies aimed at reducing fresh water consumption and the need for private participation to offset financial risks. These elements hint at an eventual attempt to return to aspirations expressed during Enrique Peña Nieto’s term in office. The irony of López Obrador’s successor, an academic specialising in climate science, promulgating the revival of fracking has not gone unnoticed within the environmentalist movement, which has already announced its intention to oppose the measure.

Mexico’s case is paradigmatic for understanding the barriers to the development of fracking. It is not sufficient to have good geological prospects, nor a history of producing oil. Nor is it enough to adduce arguments regarding energy or fiscal security, or carry out the necessary reforms; it is fundamental to secure a widespread consensus that will enable resistance to its development to be overcome when political power changes hands.

Colombia: a well-prepared industry, but lacking political and legal consensus

Although Colombia is not normally classified as a petrostate, its economy significantly depends on the income derived from crude oil exports, which in 2023 accounted for 25% of the total. This is not counting the production of other fossil fuels such as coal and natural gas, the latter going mainly into domestic consumption. Unlike other Latin American countries, Colombia has not experienced any major waves of energy nationalism, owing to its limited reserves and its dependence on foreign investment. The Colombian approach has been pragmatic: attracting investment without renouncing national interests, which has led to it being classed as a ‘free-market rarity’ in the region.

Following the liberalisation of the sector in 2003, Colombia doubled its output thanks to competitive tendering processes, establishing itself as an attractive destination for investors, and Ecopetrol was heralded as one of the most efficient companies in the region. This growth ran its brief course amid the natural depletion of conventional reserves, which ended up threatening both oil-derived income and the security of natural gas supplies. Specifically, the forecast decline in gas output has been the cause of particular concern given that it functions as a back-up source on the occasion of the frequent droughts that affect the generation of hydro-electricity, responsible for more than 65% of the country’s electricity, and the high cost of resorting to LNG imports as an alternative. Amid the decline in conventional reserves and given the oil industry’s record of openness to foreign investment, as well as its acknowledged institutional pedigree, the development of fracking was seen as a promising option for sustaining output and safeguarding energy security.

In this context, in 2014 the government of Juan Manuel Santos (2010-18) published technical and environmental guidelines for regulating fracking after two years of consultations. Nonetheless, the social and academic opposition surrounding the Fracking-Free Colombia Alliance led to a moratorium imposed in 2018 by the Council of State, which suspended the commercial development of fracking as a precaution. As an alternative, Iván Duque’s administration (2018-22), despite promising not to pursue fracking in its campaign, set up Integrated Research Pilot Projects (PPII) to conduct a scientific study of its viability and awarded contracts to Ecopetrol and ExxonMobil in the Middle Magdalena Basin. Meanwhile, Ecopetrol invested US$1.5 billion in the Permian Basin in the US, with the goal of acquiring experience and transferring it to Colombia.

Amid pressure from civil society, however, in 2020 the Council of State announced the commercial suspension of fracking-related activities, although it allowed the pilot projects to continue under strict supervision. In that same year, Duque signed Decree 328, which established the regulatory framework for these pilot projects, but this was subject to fresh lawsuits owing to the lack of public participation and ambiguity with regard to how and by whom they were supposed to be executed. This delayed their implementation until, with Gustavo Petro elected to office in 2022, the government adopted an explicitly anti-fracking stance, which halted all fracking-related activities. In 2023, under the influence of its new Director General, Ecopetrol definitively abandoned its fracking plans in Colombia, and although it has decided to maintain its operations in the US (given that they account for more than 10% of the company’s crude output), it set out a new strategic plan focused on decarbonisation and the maintenance of the country’s conventional output. Meanwhile, the government tried unsuccessfully to promulgate Law 150 of 2024 with the goal of formally banning this technique. Somewhat surprisingly, support for fracking seems to have risen in recent years and has returned to the agenda for the 2026 presidential campaign. According to the Oil Barometer, support among Colombiansfor fracking in their municipality has doubled from a low point of 14% in 2019 to 28% in 2025.

Despite enjoying the political support of two consecutive governments under Santos and Duque, the backing of Ecopetrol and the interest of investors with experience in the industry, such as ExxonMobil, Colombia provides evidence of how civil society has succeeded in paralysing the development of fracking, including pilot projects, using judicial means. Energy security considerations, the existence of a well-established oil industry and political support have once again proved insufficient in the absence of an authentic social licence to operate.

Algeria: an oil industry in need of reform and a social licence that remains pending

Algeria is an oil and gas producer whose economy meets the classic definition of a petrostate: high dependency on revenue from hydrocarbon exports and the minimal diversification of its productive economy. Its energy policy has traditionally been characterised by a pronounced degree of oil nationalism that prioritises national sovereignty exercised through control of the state-owned Sonatrach company.

The rapid increase in domestic consumption of natural gas and oil, stimulated by generous consumer subsidies, together with the gradual depletion of the country’s main gas field, Hassi R’Mel, have reduced the forecasts for energy-derived income in the future. Aware that the stability of the regime to a large extent rests on the continuity of this income, the Algerian leadership saw its abundant reserves of shale gas (the third largest in the world) as a possible means of reviving hydrocarbon production. In 2013 the government embarked on an initial reform of the restrictive Algerian legal framework, introducing specific fiscal incentives for exploring non-conventional resources. This regulatory easing enabled the first shale gas well to be drilled in the Ahnet basin in 2014, although the initiative triggered a vocal public response, with unusual protests in Ain Salah, which spread to other regions. The fall in international oil prices shortly after the launch of the exploration campaign, combined with the regime’s caution regarding social discontent in the post-Arab Spring context, paralysed the development of fracking for almost a decade.

In order to overturn this situation, a new hydrocarbons law was enacted in 2019, a relatively ambitious reform that, while preserving Sonatrach’s majority stake, significantly reduced the fiscal burden on investors and established a more flexible contractual framework for non-conventional resources. Since then, interest in fracking has revived, with efforts to attract US companies such as Chevron and ExxonMobil, and promises being made for a specific tendering round for non-conventional resources.[11]

Despite the reform, Algeria continues to offer a relatively unattractive environment for foreign investment, characterised by a complex bureaucracy that hinders imports of equipment and the admission of technical personnel. The compulsory majority stake held by Sonatrach, which lacks experience of shale, impedes the operational agility required for this type of project. This is combined with a lack of legal certainty, characterised by an erratic and opaque energy policy, which prevents investors from anticipating the key decisions emanating from political power.

Moreover, the expected costs of producing from Algerian shaleare substantially higher than those of conventional oil and gas, which raises the need either to have an in-depth reform of the domestic energy pricing system or to implement a subsidy scheme on the price at the wellhead, as in the Argentine model. Both alternatives incur major political problems in the current context, characterised by latent social discontent and a dependency on subsidies as a means of lending legitimacy to the regime. Added to this is the risk of fresh protests in those parts of the south where the fracking is likely to take place, such as those that broke out in 2014, and the uncertainty surrounding the social licence to operate in the area.

In the case of Algeria, despite its hugely promising geology and firm support for the pursuit of fracking, the absence of a flourishing oil industry and doubts surrounding the social acceptance of fracking at the local level constitute enormous barriers to its successful development.

Conclusions

The success of Vaca Muerta makes it necessary to consider whether fracking could be generalised to other developing countries. If this were possible, it would have major geopolitical and climate implications. The map of hydrocarbon producers would be transformed, allowing countries to emulate, albeit on a smaller scale, what has taken place over the last 10 years with the US’s rise as a fossil fuel superpower. The emergence of new non-conventional hydrocarbon producers, whether Argentina, Colombia or Algeria, to name a few cases with enormous geological potential, would transform the balances of power among oil producers, to the detriment of the large traditional producers and the ability of the Organisation of Petroleum Exporting Countries plus (OPEC+) to set international prices.

From the climate-change perspective, the widespread use of fracking could substantially raise greenhouse gas emissions, since it is an extractive technique that involves considerable quantities of carbon dioxide and methane, the production of which could, as has occurred in the US, delay the uptake of renewable energies. Meanwhile the environmental impact of this technique is an important consideration, and without a proper regulatory framework wherever it is pursued its effects on groundwater and ecosystems could be irreversible.

However, as is evident from the Argentine case and the cases of Mexico, Algeria and Colombia, geological resources are a necessary condition to undertake fracking but not sufficient to enjoy its benefits. Argentina is striking as an exception among developing countries because it has managed to maintain a favourable narrative over time, significant political support across the political spectrum, an oil industry that is open to foreign investment and to consolidate its social licence to operate. It is not impossible to replicate the Argentine experience in other locations, but recent history suggests that the success of Vaca Muerta should be interpreted with caution, and more as an exception than as a benchmark.

[1] Hydraulic fracturing is a technique that involves breaking up bedrock with pressurised water to release gas or oil. Horizontal drilling enables a larger part of the oilfield to be reached by extending the well laterally underground. Both of these technologies have enabled fracking to be deployed in the US over the last 20 years.

[2] The terms ‘shale’ and ‘fracking’ are used interchangeably in this article to refer to the extraction of non-conventional hydrocarbons. ‘Fracking’ refers to the hydraulic fracturing technique used in their extraction, while ‘shale’ refers to the sedimentary rock that contains the resource. Non-conventional resources are generally those that cannot be extracted using traditional methods owing to their technical or geological characteristics.

[3] Groundwater refers to the water that accumulates naturally below the surface, forming underground layers or deposits that supply wells, springs and rivers.

[4] The characterisation of Vaca Muerta as Argentina’s ‘El Dorado’ appears in Maristella Svampa (2018), Chacra 51: regreso a la Patagonia en los tiempos del fracking.

[5] Law 26,741 was approved in the Chamber of Deputies on 3 May 2012 by 208 votes in favour to 32 against.

[6] One of the great paradoxes of the Vaca Muerta operation is that only a few months after the nationalisation of Repsol-YPF there was a major influx of foreign investors. This may be attributable to a perception of reduced risk of expropriation among shale sector investors as argued by G. Collins, M.P. Jones, J. Krane, K. Medlock & F. Monaldi (2021), ‘Shale renders the “obsolescing bargain” obsolete: political risk and foreign investment in Argentina’sVaca Muerta’, Resources Policy, nr 74, 102269.

[7] In 2011 an Ecuadorean court sentenced Chevron to pay US$9.5 billion for environmental damage to Amazonia, leading to a failed attempt to sequester the assets of its Argentine subsidiary in 2013.

[8] ‘Upstream’ in the energy industry refers to the initial phase in the oil and gas production chain, which includes the exploration, drilling and extraction of the underground resources before they are transported and refined.

[9] The Milei government decided to change its name to the Perito Francisco Pascasio Moreno gas pipeline in 2024.

[10] For the legitimacy of YPF in Patagonia, see H.M. Palermo & A.M. García (2007), ‘El rol del Estado en la construcción de sentidos. El caso YPF’, Theomai, nr 16, p. 7-15.

[11] For an in-depth study of the Algerian case, regarding both its conventional and non-conventional resources, see G. Escribano (2025), ‘Otra ronda de gas argelino para Europa’, ARI, nr 37/2025, Elcano Royal Institute.

La entrada Vaca Muerta: exception or benchmark? se publicó primero en Elcano Royal Institute.

• The immigrant population in Spain now exceeds 9 million and has grown at a rate of 600,000 people per year since the end of the pandemic.
• Immigrants account for 23% of Spain’s working population. Up to 90% of the new jobs created between January 2024 and March 2025 were filled by immigrants.
• The average level of educational attainment among immigrants in Spain is low and they are employed in jobs that require little in the way of qualifications.
• Various economic sectors now depend completely or largely on immigrant labour. For instance, 72% of those employed in domestic service and 45% in hospitality are immigrants.
• Educational drop-out rates are very high among teenagers and youths of immigrant origin, three times the rate of native Spaniards, which augurs difficulties for their occupational and social integration.

Analysis

This paper is the first in a series of analyses that the Elcano Royal Institute is publishing on the occupational integration of immigrants in Spain. Thus, for the various major population groups born abroad the most salient data will be analysed in terms of educational attainment levels, rates of employment, activity and unemployment, occupational sectors and earnings.

The goal is to obtain a panoramic picture that will reveal the main features of how the employment integration of immigrants in Spain is unfolding. Adult migrants’ integration into the world of work is one of the major preconditions for their social integration and for their full acceptance by the bulk of society.

This first analysis sets out data for the entirety of the immigrant population, divided by origin, which will be complemented in successive studies with research into each of the major groups of immigrants in Spain, such as Latin Americans, Europeans from high-income countries and Africans.

The first part of the analysis is devoted to setting out the basic characteristics of immigration in Spain, while the second part deals with the data relating to their integration in the employment market.

The main sources used in drawing up this text were the Continuous Municipal Register (Padrón Continuo de Población), the Continuous Population Statistics (Estadística Continua de Población) and the Active Population Survey (Encuesta de Población Activa, EPA, microdata for the fourth quarter of 2024), all compiled by the National Statistics Institute (INE).

The context: size, composition and characteristics of immigration in Spain

A preliminary note is required before going any further: the definition used for international migrants in this text is the one used by the UN and its Population Division. International immigrants are people who live in a country other than the one in which they were born. It follows from this definition that people are immigrants regardless of their legal status in their country of residence, whether they are regular, irregular or have received a new nationality, rich or poor, economic immigrants or political refugees.

Defined as ‘born abroad’, and according to the most recent data published by the INE in its Continuous Population Statistics, the total number of immigrants in Spain is 9,379,972 people (provisional figures as at 1 January 2025), accounting for 18% of the total population. This group comprises first-generation immigration (which is to say born abroad). Some countries include second-generation immigration in their figures, in other words the descendants of the first generation, and even in some cases successive generations. The reason for this attention being paid to second and subsequent generations is the realisation in several countries that many of these descendants of immigrants face specific difficulties that threaten their successful integration. In Spain, second-generation immigrants, defined as the offspring of a mother and/or father born abroad, now amount to 3,100,000 individuals (EPA, 4Q24). Of these, 1,800,000 are the offspring of two immigrant parents and 1,300,000 are the offspring of only one immigrant parent.

A large number of first-generation immigrants now resident in Spain have obtained Spanish nationality, in total 2,800,000 people, most of them Latin Americans, according to figures from the Municipal Register on 1 January 2024. This is why the figures relating to the population of ‘foreigners’ in Spain are substantially lower than those relating to the immigrant population.

All the population increase that Spain has recorded so far this century is attributable to inward migration. The reduction in the number of births per woman is a phenomenon that increasingly affects all continents, such that nearly the whole of Europe, the Americas, Oceania and part of Asia now find themselves below the replacement rate (2.1 children per woman) and consequently heading towards a smaller total population. For some years Spain has ranked among the countries with the lowest fertility rate in the world (1.12 children per woman) and its population, in the absence of immigration, would therefore now number below the 40 million that it had at the start of the century. But immigration has done much more than preventing demographic decline: it has caused a substantial increase in the total population.

In total the Spanish population has grown 23% so far this century, an increase three times greater than the average undergone in the same period by other western European countries, specifically those that already belonged to the EU at the start of the century.

In terms of origin, the immigrant population in Spain is highly diverse, with representation from all continents and more than 50 countries from which at least 9,000 people have arrived,[1] and 22 with more than 100,000. The largest source is Morocco, with more than one million immigrants recorded at the start of 2024, followed by Colombia, with 850,000. However, Latin American immigrants as a whole greatly exceed any other group and constitute one of the most striking features of immigration in Spain: Latin American immigration accounts for 47% of the total.

This preponderance of Latin American immigrants, with their linguistic and religious affinities to the bulk of the Spanish population, creates a very different social context to the one prevailing in other Western European countries, where Asia and Africa are the main source of non-EU immigration. This predominance of Latin American immigration in Spain is an outcome, first, of the visa exemption that allows free entry to the citizens of most Latin American countries; secondly, to the ‘network’ effect, whereby immigrants are attracted towards places where acquaintances, family members and friends have already installed themselves; third, to the reuniting of families; and fourth, to the facilities Spain offers, enabling Latin American immigrants to apply for Spanish nationality, something they can receive after two years of legal residence, compared with the 10 years required of other immigrants.[2]

At a much lower level than South American immigration is European immigration from EU countries (18%), Africa (17%), non-EU European countries (9%) and Asia (6%), essentially China and Pakistan. Annex 2 provides the complete list of immigrant source countries.

Youth tends to be a prevailing characteristic of international migration when viewed as a large-scale phenomenon: youngsters are those who most often take the decision to leave their country. The age pyramid of the immigrant population in Spain is substantially younger than that of their native counterparts, largely owing to the continuous inflow of new immigration after the country recovered from the economic crisis of 2008-14, apart from the 2020-21 period (COVID-19). An annual average of 600,000 immigrants have installed themselves in Spain since January 2022 (net figures, in other words deducting those who left the country). Immigrants often arrive in the company of their young children or they reunite subsequently, thereby adding an even greater youth factor to the migratory inflow.

Even immigration from Western European countries is now younger than the native population. Contradicting the stereotype that sees immigrants from rich European countries as retirees living on the Spanish coasts, immigration from these countries is concentrated in the age of peak economic activity. Indeed, 67% are aged 20-59 (immigrants from the UE-27 excluding those from Romania, Bulgaria and Portugal). As a result of this process, immigrants of any origin now account for 29% of the population resident in Spain aged 25-49. In the group of greatest concentration, aged 30-34, there are 52 immigrants for every 100 natives (34% of the total for this age group).

The effect of the arrival of young immigrants of reproductive age can be seen in the age structure of the Spanish-born population (Figure 1). As mentioned above, the offspring born in Spain to an immigrant mother and/or father now number more than three million people. Meanwhile, the birth rate among native mothers has fallen considerably: in the 2009-23 period it fell by 42%.[3] As a consequence, among those aged under three, the children of an immigrant mother and/or father now account for 30%.[4]

In terms of nationality, geographical origin and parental geographical origin, the population resident in Spain breaks down as shown in Figure 2. Here it was necessary to rely on the EPA data, because the Municipal Register (Padrón) does not enable the components of the second generation to be identified. The Native Population label in Figure 2 refers to the population born in Spain to a mother and father also born in Spain. It currently accounts for 75% of the total population. ‘Second generation’ refers to the population born in Spain to a mother and/or father born outside Spain. The group of immigrants who have obtained Spanish nationality also includes those who maintain dual nationality (Spanish and the nationality of their home country).

In terms of geographical origin, classified by major regions, Figure 3 shows the break-down, based on Municipal Register data as at 1 January 2024 (the data relating to 2025 do not enable such a break-down to be made).

Immigration is distributed heterogeneously in Spain, with as many as 15 provinces where it now represents more than 20% of the population (Figure 4). Predominating among these are the economic and tourist hubs such as Madrid, Barcelona, the islands and the Mediterranean coast. As a whole, immigration is greater in the eastern part of the peninsula and diminishes towards the west, with Extremadura and the provinces of northern Andalusia bringing up the rear.

Lastly, as far as gender is concerned, although there are striking imbalances depending on the geographical origin (male over-representation in African immigration and female over-representation in South American and Eastern European immigration), these partial imbalances cancel each other out, and as a whole the immigrant population is broadly balanced, with a small 51% majority of women, similar to the one any population exhibits naturally. In the succeeding analyses of specific immigrant groups the applicable gender divisions will be recorded.

The integration of immigrants into the Spanish employment market

As well as the heterogeneity of their origins, the immigrants are highly varied in terms of important variables affecting their ability to integrate, such as their educational attainment level, their participation in the employment market and their levels of income. In order to show this diversity and compare it with the situation of the Spanish-born population, an analysis of the microdata contained in the Active Population Survey (EPA, 4Q24) has been conducted.

The study focuses on individuals aged 25-59, in order to exclude youngsters still in training and adults who have retired from the employment market[5] and to make the groups being compared as similar as possible, given that the immigrant population aged over 59 is still very small in comparison to its Spanish-born counterparts.

When analysing the microdata, the population aged 25-59 was broken down into various groups: (a) the native Spanish-born population; (8) immigrants from high per capita income countries, similar or higher than Spain’s (henceforth to be referred to as HIC immigrants); (c) immigrants from low per capita income countries, lower than Spain’s, (henceforth referred to as LIC immigrants); and (d) second-generation immigrants (born in Spain to a mother and father born in low per capita income countries).[6] Meanwhile, immigrants from low per capita income countries were divided into four groups depending on their origin: Latin Americans, Europeans (Romanians, Bulgarians, Ukrainians, etc), Africans and Asians. The details of these groupings are set out in Annex 1.

One of the main factors affecting integration into the employment market is educational attainment level, where there are strikingly major differences depending on geographical origin (Figure 5). Thus, while 49% of native Spaniards and 57% of HIC immigrants have a university or higher education qualification, among the LIC immigrants the percentage falls to 26%. For its part, this latter group is also highly heterogeneous, because whereas Latin Americans and Europeans from LICs exhibit percentages of 32% and 28% respectively, in the case of African immigrants this falls to 10%.

An especially concerning finding is the low level of educational attainment achieved by second-generation immigrants: 39% have completed only compulsory secondary education and only 25% of them have obtained a university qualification, 24 percentage points below native Spaniards.[7] This statistic shows that there is a failure of integration affecting a considerable proportion of second-generation immigrants in Spain: various studies have warned about the high educational drop-out rate among the children of immigrants (or immigrants themselves in the case of those who came to Spain in childhood or adolescence), especially among males, and about the risk that this incurs for their subsequent integration into the employment market and more generally for their social integration.[8]

As far as the activity rate[9] is concerned, this exceeds 80% for all groups, with the exception of Africans and Asians (Figure 6). In the African and Pakistani cases, the low activity rate has to do not only with the low educational attainment levels but also with the traditional nature of their gender roles, whereby women are expected to stay at home and not enter the employment market. Only 46% of immigrant women from Africa are active, compared with 87% of their male counterparts and 84% of native Spanish women (Figure 7).

Turning next to the employment rate,[10] all immigrant groups exhibit levels lower than the native population (80%), although with small differences in the cases of immigrants from high-income countries and Latin Americans. Among the other groups, however, the difference is at least nine percentage points and reaches 11 percentage points in the case of adults forming part of the second generation of immigrants and 28 percentage points in the case of African immigrants.[11]

In line with these activity and employment rates, unemployment rates are significantly higher among immigrants from low-income countries when compared to native Spaniards (Figure 8); this applies especially to African immigrants, with three times the rate of their native counterparts, but also among adult second-generation immigrants, with double the rate.

Again, the low employment and high unemployment rates among second-generation immigrants show that a failure is already unfolding with an implicit risk to social cohesion and a cost to the welfare state.

The educational attainment level of the immigrant population also shapes the types of activity they engage in. LIC immigrants tend to be concentrated in four sectors, accounting for more than half of this workforce: hospitality, retailing, construction and the manufacturing industry (Figure 9). As far as industry is concerned, immigrants are essentially employed in food-related jobs: meat-processing, bakeries, canneries, dairy processing… which account for 30% of all the LIC immigrants employed in this sector.

Sector concentration is especially high in the case of Asians. Three out of every four in this group are employed in hospitality or retailing. As far as the second generation is concerned, the offspring of LIC immigrants, they fall predominantly into two sectors, retailing and hospitality, which employ 53% of the workers in this group.

Domestic service stands out when attention turns to the proportions of workers in each sector (Figure 10). Here, 71% of workers (almost all of them women) are immigrants from low-income countries and the majority are Latin American women (53% of all workers in the sector). Next in the ranking of sectors most dependent on immigrant labour is hospitality, with 45%, followed by construction (32%), agriculture (31%), and administrative activities and auxiliary services (28%). In transport, ‘other services’, retailing and real estate activities the percentage of the working population originating from low-income countries also exceeds 20%.

Located at the other extreme, where immigrants have the least presence, are the sectors of Education and Public Administration, Defence and Social Security. The bulk of employment in these sectors involves civil service jobs and the institutionalised requirements for entering this service (including EU citizenship) hinder those immigrants who have not obtained Spanish nationality from gaining entry. Meanwhile, the selective entry process favours people with a high level of educational attainment. The result is that only 4% of immigrants from low-income countries are employed in the public sector (Figure 11).

Immigrants are predominantly found in the private sector as wage-earners, with the exception of Asians. Almost half of the latter are self-employed or entrepreneurs. As far as immigrants from ‘wealthy’ countries are concerned, they have a significant presence in white-collar occupations: professional, scientific and technical activities as well as educational, information, financial and real estate activities, with a high percentage of self-employment.

In terms of employment categories, LIC immigrants are concentrated in ‘basic occupation’ categories (Figure 12), where a fourth of all this group’s employees are found –as opposed to just 8% of native Spaniards– and in ‘service workers’, accounting for 27% of LIC immigrants and 18% of native Spaniards, whereas immigrants from high-income countries are above all found in the ‘technicians and scientific and intellectual professionals’ category. Among native Spaniards too this is the category that accounts for the greatest percentage of workers.

Overall, a ‘segmentation’ or ‘bifurcation’ of the employment market has occurred, whereby immigrants from low per capita income countries are concentrated in activities that require fewer qualifications and a greater degree of physical work (agriculture, retailing, hospitality, construction, domestic service, low-tech industries…) and, within these sectors, in roles with a lower position in the organisational hierarchy.

One outcome of this occupational distribution involves differences in earned income. The Active Population Survey (EPA) does not include questions about income, so researchers in this context are obliged to resort to the taxable income statistics compiled by the Spanish Social Security administration. In these statistics, individuals are classified by nationality, not by country of birth, and only countries with large numbers of contributors are dealt with separately.[12]

The average taxable income of citizens from high-income countries is €179 higher than their Spanish counterparts, a group that includes immigrants who have obtained Spanish nationality (Figure 13). It should be borne in mind that the Social Security taxable income bands are capped at their higher limit,[13] such that the highest salaries, those that are paid to directors in certain sectors, are not shown in the taxable income bands. It is highly likely therefore that the average earnings difference is greater than the one that emerges from the taxable income bands. Meanwhile, the gap between Spaniards’ average taxable income and that of citizens from low-income countries is €532, with Asians bringing up the rear.

Their lower educational attainment level is not the only factor accounting for LIC immigrants’ concentration in the aforementioned activities. Some immigrants with a university degree (as mentioned, 26% of LIC immigrants) only find employment in jobs that do not require this qualification. To a large extent this ‘squandering’ of their qualifications is due to the extremely prolonged process whereby their degrees are recognised. Meanwhile, overqualification is a widespread feature of the Spanish employment market, a consequence of the high proportion of people with university degrees, although it affects immigrants to a greater extent. More than half (54%) of immigrants with a university degree work in a role that does not require this qualification, a phenomenon that affects 33% of native Spanish graduates.[14] In addition to the problems related to the recognition of their degrees, this difference is also attributable to immigrants’ difficulties in accessing public sector employment, although in some specific areas, such as medicine, teaching and research, their presence is becoming increasingly visible.

The EPA data also reveal the educational status of youngsters aged 16-20 who have completed the period of compulsory education (ending in Spain at the age of 16), but the vast majority of whom have not yet joined the employment market.[15] In the case of native Spaniards, 86% continue in education and the same applies to 84% of second-generation immigrants and 82% of young immigrants from high per capita income countries (Figure 14). However, among immigrant teenagers (in other words, born abroad) from low-income countries (what is normally known as generation 1.5, having come to Spain in childhood or adolescence) only 67% continue in education, with major internal differences. 77% of Asians aged 16-20 remain in education, but only 65% of Africans and 66% of Latin Americans do so.

Again, these figures are a cause for concern from the viewpoint of the future employment prospects of these younger immigrants and suggest that the situation of generation 1.5 is even worse than that of the second generation, born in Spain. It also suggests that the Spanish education system is able to remedy some of the weaknesses exhibited by immigrant children when they first join it, but it does so to an insufficient degree: the outcomes are better for those who undergo all of their education in Spain (the second generation) than for those arriving from other educational systems, but they are also insufficient in the former case to achieve an equivalence of capabilities with the native Spanish population.

Conclusions

Spain is undergoing a transcendental change in its employment market with consequences for its economy and society as a whole that are as yet little studied. The bulk of the new employment that has been created in recent years, since the economic recovery following the pandemic, has been taken by immigrants, who account for 90% of all new jobs created in the five most recent quarters covered by the EPA (from January 2024 to March 2025).

This is the result of the post-pandemic growth in inward migration, with a net annual average of 600,000 people –in other words, subtracting those who leave the country– consisting above all in recent years of Latin Americans.

Immigration from countries with lower incomes than Spain’s accounts for 91% of all immigrants who are of peak working age (aged 25-59), and one of their chief characteristics is their low average level of educational attainment, substantially lower than their native Spanish counterparts and especially low in the case of immigrants from Asia and Africa. The arrival in recent years of thousands of medium- and high-income Latin American immigrants, with university qualifications, is a highly striking phenomenon, but still a relatively small part of overall Latin American immigration.

LIC immigration exhibits lower rates of employment than those of the native Spanish population in the same age groups, much higher rates of unemployment, and activity that is concentrated in low-productivity service sectors and consequently low earnings and low contributions to the pensions system.

Various sectors currently depend mainly or very significantly on immigration: at least 30% of the employees in domestic service, hospitality, construction and agriculture are immigrants, who have taken almost all the new jobs created in these sectors.

Immigration as a proportion of the total population will grow in coming years: immigrant children and the children of immigrants already account for 32% of children in primary and compulsory secondary education, at a time when the number of children being born to native Spanish women is falling. If the current trend continues, the population of immigrant origin will come to account for a growing proportion of the total. In this context, with a view to the future, the figures relating to the educational outcomes for second-generation and generation 1.5 immigrants are a particular cause for concern: their educational drop-out rate is 33%, three times that of their Spanish-born counterparts. Among those born in Spain to an immigrant mother and father and aged over 25, 39% have completed only the compulsory stage of secondary education, which means their being restricted to low-qualified ‘basic’ roles in the Spanish employment market and a greater risk of being unemployed.

All of this has a knock-on effect on second-generation immigrants’ social integration. Over the medium term it is foreseeable that this will have an impact on Spanish public opinion towards immigration, which is increasingly converging with the European average, and therefore consequences regarding the position immigration occupies in the political debate.

Annex 1. Definition of the categories used in the analysis of the employment market based on EPA microdata

Native population aged 25-59: born in Spain to a Spanish-born mother and father; 72.1% of the total.

Second generation aged 25-59: born in Spain to a mother and father born in countries with a lower per capita income than Spain’s; 0.3% of the total.

HIC immigrants aged 25-59: born in high per capita income countries (equal to or higher than Spain’s in 2024). This group comprises almost in its entirety western Europeans, with a small presence of people from the US, Canada, Australia, Japan, South Korea, Saudi Arabia, Israel and other very small groups; 2.4% of the total.

LIC immigrants aged 25-59: born in low per capita income countries (lower than Spain’s in 2024). This includes the bulk of immigrants resident in Spain born in Latin America (13.5%), Africa (4.6%) and Asia (1.4%), plus eastern Europe (including Romania and Bulgaria) and Portugal (4.3%). As a group they account for 23.7% of the total.

These categories exclude from the analysis 1.5% of the population aged 25-59 (350,958 people): born in Spain to immigrants from high per capita income countries, people whose country of birth is not identified in the EPA or born in Spain with only one immigrant parent.

Annex 2. Immigrant population by country of birth, 1/I/2024

Figure 15. Distribution of the immigrant population by country of birth, 1/I/2024

[1] This is the smallest population that the INE distinguishes by country of birth.

[2] With exceptions such as citizens of Andorra, the Philippines and those of Sephardic origin.

[3] INE, Movimiento Natural de la Población.

[4] J. Bayona-i-Carrasco & Andreu Domingo (2024), ‘Descendientes de inmigrantes nacidos en España: ¿hacia una integración segmentada?’, Revista Española de Investigaciones Sociológicas, nr 187, p. 25-44.

[5] The activity rate in Spain falls sharply after the age of 60, going from 78% to 58% (both sexes, 1Q25, EPA).

[6] This group has been singled out because research shows that the children of two immigrant parents hailing from low-income countries are those that face the greatest integration difficulties, in comparison to their native peers or to the children of only one immigrant parent, while the offspring of immigrants from wealthy countries do not encounter particular problems. These last two groups, which, according to EPA data, number 350,958 people aged 25-59, are not included in this analysis.

[7] Comparing the second generation with native Spaniards in the 25-30 age group, when formal education has ended for almost all, it emerges that 18% of native Spaniards have obtained only the compulsory secondary education qualification, whereas 32% of second-generation immigrants fall into this category.

[8] S. Carrasco, J. Pàmies & Laia Narciso (2018), ‘Abandono escolar prematuro y alumnado de origen extranjero en España ¿un problema invisible?’, CIDOB; VVAA (2021), ‘¿Por qué hay más abandono escolar entre los jóvenes de origen extranjero?’; and J. Bayona-i-Carrasco & Andreu Domingo (2024), ‘Descendientes de inmigrantes nacidos en España ¿hacia una integración segmentada?’.

[9] The activity rate is defined as the percentage of the population belonging to the age group in question (in this case, aged 25-59) that is in work or is looking for work.

[10] The employment rate is defined as the percentage of the population belonging to the age group in question (in this case, aged 25-59) that is in work.

[11] Other published research suggests higher activity and employment rates for immigrants than for their native counterparts. The difference is due to the fact that such analyses do not take into account the different age structures of immigrants and natives, nor do they focus their analysis, in either case, on the age groups where working activity tends at its peak.

[12] The countries identifiable in the Social Security administration’s taxable income statistics are all those in the EU-27 plus the UK, Ukraine, Morocco, China, Venezuela, Colombia, Ecuador, Bolivia, Peru and Argentina.

[13] The maximum income in 2025 is €4,909 per month.

[14] Various authors (2024), ‘España desperdicia el talento extranjero’. El País.

[15] The activity rate of those aged under 20 is 12% (both sexes, EPA 1Q25).

La entrada Immigration and the labour market in Spain se publicó primero en Elcano Royal Institute.

• The structural transformation of the international order has created a historic window of opportunity enabling Europe simultaneously to strengthen its strategic autonomy and its financial sovereignty. This paper sets out an overarching proposal that blends two complementary contributions: first, a financial design for a profound and liquid Eurobond market originally devised by Olivier Blanchard and Ángel Ubide at the Peterson Institute for International Economics; and, secondly, a geostrategic analytical framework that shows why this instrument is not only appropriate but also indispensable for overcoming Europe’s institutional paralysis.
• The central thesis unfolds at three levels. First, Europe faces a world where interdependence has ceased to be a source of shared prosperity and has become the main vector of coercion on the part of hegemonic powers operating under a logic of zero-sum or even negative-sum games. European vulnerabilities in energy, technology, defence and finance are not additive but multiplicative: weakness in one dimension amplifies the others.
• Secondly, the extreme heterogeneity of these vulnerabilities’ effects on each of the EU’s Member States –which will be referred to here as ‘national pain thresholds’– combined with the current European rules of governance –particularly the system of qualified majority voting– generates structural paralysis. The analysis to be set out here shows that no scenario of coordinated response to China is viable under the current voting rules and only two minor scenarios are viable in the case of the US. Game theory shows that only coalitions with credible compensation mechanisms between winners and losers can escape such a suboptimal Nash equilibrium.
• Third, the Blanchard-Ubide proposal to issue Eurobonds equivalent to 25% of EU GDP, worth around €5 trillion, simultaneously provides the safe asset that global investors seek as an alternative to the US dollar, the financial mechanism for the cross-compensations that would make coalitions of the willing viable and the cornerstone of a financial autonomy without which no other form of autonomy is sustainable. The proposal does not increase debt or the deficit: it restructures existing debt by exchanging national debt for senior Eurobonds, backed by an assignment of national VAT receipts to the EU.
• The proposal has garnered a highly positive reception. Philip R. Lane, member of the executive committee of the European Central Bank (ECB), has explicitly discussed the Blanchard-Ubide design as a pathway to broadening the European market for safe assets. The Center for Strategic and International Studies (CSIS) has described it as the most coherent proposal for Europe and Germany to leverage their monetary power. The convergence between the Letta and Draghi reports and the Blanchard-Ubide proposal comprises a consistent reformist triad: defragmenting the single market, defragmenting investment and defragmenting public debt.

Analysis

Introduction: the European moment

Europe is at a historic turning point. The international order that for decades ensured its security, facilitated its prosperity and enabled the construction of the most ambitious integration project in contemporary history has ceased to exist in the terms in which it was conceived. As the Canadian Prime Minister Mark Carney said, we are in the midst of a rupture, not a gradual transition within a recognisable framework: the framework itself has ceased to work.

In the speech he gave on 2 February 2026 at the University of Louvain, Mario Draghi gave this rather stark diagnosis: Europe faces a future in which it risks seeing itself subordinated, divided and deindustrialised at the same time. It is a future in which the US imposes tariffs, threatens European territorial interests and makes clear, for the first time, that it views European political fragmentation as conducive to its interests; and where China, which controls critical nodes of key global supply chains, is prepared to exploit this leverage over Europe.

Against such a backdrop, this paper sets out a proposal that is simultaneously financial and strategic. It is neither a technical exercise in debt engineering nor an abstract geopolitical analysis. It seeks to show that the creation of a massive Eurobond market is the necessary condition that will enable Europe to escape the institutional trap that paralyses it when faced by external threats; and that the window of opportunity for acting on this is open now.

The analysis is structured in four parts. The first analyses the transformation of the international order and its effects on European vulnerabilities. The second sets out the analytical framework of the hegemonic coercion and the ‘pain thresholds’ that account for European paralysis. The third formulates the financial proposal of Eurobonds and their connection to the theory of compensatory coalitions. Finally, the fourth provides a summary of the main reactions and debates that the proposal has elicited in the international political economy community.

The transformation of the international order

2.1 From a positive-sum game to hegemonic coercion

The world has gone from a paradigm of positive-sum games, where cooperation generated widely shared benefits, to one dominated by the logic of zero-sum or even negative-sum games. The change is not merely circumstantial: it reflects a profound reconfiguration of global hegemonic dynamics. What Thucydides noted 2,400 years ago in his Melian Dialogue has become alarmingly pertinent: the strong do what they can and the weak suffer what they must.

The extraordinary dividends reaped by the former international system of cooperation and interdependence speak for themselves. The emerging countries, which with more than 90% of the world’s population barely accounted for 20% of global GDP at the turn of the millennium, today account for 60% of global GDP at US dollar purchasing power parity. Despite the undoubted uplift to global well-being that this redistribution has entailed –and which goes well beyond share of GDP, as shown, for instance, in the article by Max Roser titled ‘The world is awful. The world is much better. The world can be much better’– a series of factors, prominent among which was China’s admission to the World Trade Organisation (WTO) and the blurring of boundaries between trade and security, have transformed the prevailing vision of the international order.

2.2 From normative power to transactional power

The international post-war system, designed predominantly by the US, was founded on rules, institutions and shared values, lubricated by a functional dose of hypocrisy that enabled the contradictions to be managed without destroying the institutional framework. Now it has been replaced by purely transactional power: the power of ‘pay to play’, embodied by the current US Administration, in which each interaction is a bilateral negotiation of immediate interests.

As Mario Draghi has observed, the former world order did not fail because it was built on an illusion: it produced real gains for the US as the hegemonic power, for Europe by enabling it to integrate into trading networks and also for developing countries. Its failure lay in what it could not remedy. Global trade became divorced from the Ricardian principle that exchanges should follow comparative advantage. Some countries pursued an absolute advantage by deploying mercantilist strategies, imposing deindustrialisation on others. Institutions of multilateral governance lacked the mechanisms for tackling these imbalances.

2.3 A multipolar world with multiple risks

The conventional analysis posits the scenario of a bipolar struggle between China and the US. History urges caution. In the Peloponnesian War, the established power won, but its victory was so pyrrhic that barely 30 years later a third party, Philip of Macedon, invaded Greece. The Greek city states never recovered their previously important role.

The resulting world will probably be multipolar, with more distributed powers. This prospect is not necessarily favourable to liberal democracy. In a context of exploitable vulnerabilities and the struggle for power, oligopolistic competition may increase the chances of economic, political and even military conflict.

European vulnerabilities: a multiplicative system

3.1 Interdependence as vulnerability

What for decades constituted Europe’s greatest strength, its integration into the global supply chains and its economic interdependence, has become its main source of vulnerability. The hegemonic powers have discovered that they can instrumentalise these interdependencies as political and economic coercion mechanisms. Carney described it with the precision of a central banker: countries that negotiate bilaterally with a hegemonic power negotiate from a position of weakness, accept what is offered to them and compete amongst themselves to be the most accommodating.

The analyses conducted by the Elcano Royal Institute identify four major areas of vulnerability: energy, technology, finance and defence. The weightings accorded to each synthesised indicator reflect the immediacy of the effect: energy scores 40% (the 2022 crisis showed how an energy shortfall had instantaneous effects); technology 35% (the dependence on advance semiconductors is structural); and defence 25% (critical and yet, until not so long ago, mitigated it was thought by NATO guarantees).

3.2 The multiplicative nature of the vulnerabilities

One of the most serious errors in addressing the new order lies in the excessive specialisation of the analyses. Each vulnerability is addressed by specialists who devise sectorial strategies. But the vulnerabilities are not additive but multiplicative.

Energy and technology vulnerabilities do not get added to each other; they multiply each other. Without renewable and competitive energy sovereignty there is no industrial capacity for making semiconductors. Without an adequate industrial and technological base, the defensive vulnerability perpetuates itself: 27 fragmented armies with duplication of capabilities and an inability to exert their strength without US logistical support.

The effects on the EU as a whole of this multiplicative interdependency of national vulnerabilities are devastating. Bearing in mind that the most sensitive variables of the indicator exhibit highly significant levels of external dependency,[1] the model predicts that 70% of EU countries would undergo an ‘extreme shock’ if any of these supplies were to be interrupted.

If the vulnerabilities are not independent, it is rational to assume that any plan that is based on individualised management strategies of each of these dependencies will be unsuccessful because the diagnosis is intrinsically incorrect and the application of this sectoral strategy will inevitably create bottlenecks in the implementation of the plan. Fragmented policies will not suffice: what the EU needs is a strategy that addresses the problem systematically.

‘Pain thresholds’ and institutional paralysis

4.1 The cartography of European resistance

The EU faces a structural dilemma: the extreme heterogeneity of national vulnerabilities hinders the formulation of coordinated responses. The 27 Member States have radically distinct ‘pain thresholds’ amid the various sources of hegemonic coercion.

A country’s ‘pain threshold’ is defined as the highest level of an external shock that it can absorb before being obliged to capitulate or block a collective response.

A low threshold means that the country will quickly abandon any collective response coalition; a high threshold indicates a prolonged capacity for resistance. The threshold is quantified by weighing economic resistance, the diversification of trade and energy sources, the ability to substitute critical imports and the political tolerance of the society in question. Scores are standardised between 0 and 1 and are validated using a Monte Carlo simulation with 10,000 iterations.

4.2 Asymmetries regarding China

In the case of a shock originating in China, Belgium has the lowest threshold (0.20), caused by the importance of the role played in its economy –directly and indirectly– by activity at the port of Antwerp. It is followed by Hungary (0.25), whose vulnerability blends political alignment with Beijing and dependence on Chinese investment stemming from its New Silk Road membership. Germany is at an intermediate level (0.30), burdened by the dependency of its car and machinery industry on the Chinese market. France (0.55) benefits from its commitment to autonomy in defence and less dependency in trade, while Poland (0.60) is the least vulnerable thanks to its low economic exposure to Beijing.

4.3 Asymmetries regarding the US

Asymmetries regarding the US are even more pronounced. Ireland has the lowest threshold of the EU (0.10): approximately 45% of its GDP relies on US technology platforms. The Baltic States cluster in a similarly low range (0.12-0.18), affected by their existential dependence on NATO as the guarantor of their security against Russia. Poland shares this factor of military alignment (0.15). At the other end of the scale, France (0.65) is the most resilient country by some distance thanks to its autonomous nuclear capability.

4.4 The voting system as an exploitable vulnerability

The heterogeneity of the thresholds interacts with the institutional architecture to create paralysis. The reinforced qualified majority system requires 55% of Member States representing at least 65% of the population. A blocking minority needs at least four Member States that jointly account for more than 35% of the population.

In the face of a Chinese shock, a blocking coalition comprising Germany, Hungary, Austria, the Netherlands and Belgium, five Member States with 29% of the population, would not formally reach the threshold. But Germany’s ability to recruit other Member States connected to its value chains would raise the percentage to 36%-38%, creating an effective blocking minority. The outcome: of the five sanction scenarios analysed involving China, none is viable under qualified majority voting. Only two out of five scenarios involving the US turn out to be viable and both would take the form of political declarations without any real consequences.

The qualified majority system has become one of the EU’s most concerning strategic vulnerabilities. It is not a design failure: the EU was conceived for a world of multilateral cooperation, where the main risk was that the large Member States would impose stipulations on the smallest. Its institutions were fine-tuned to manage this tension, not to defend themselves against external hegemonic powers prepared to exploit the asymmetries between its members.

Essentially, the EU is a herbivore obliged to survive in an ecosystem of predators. It can only respond forcefully to adversaries that do not have potential direct victims within their borders (Iran and North Korea) or that cross existential red lines (Russia and its invasion of Ukraine).

From the prisoner’s dilemma to compensatory coalitions

5.1 The suboptimal equilibrium trap

Each Member State faces a choice: either cooperate with the collective EU response, accepting potentially high domestic costs, or protect its immediate national interests by blocking coordinated action.

If negotiations proceed by addressing each vulnerability in isolation, each Member State will veto the measures that threaten its specific interests and the result will be perpetual paralysis.

This structure fits the classic model of the prisoner’s dilemma. In other words, if everyone cooperates, Europe becomes collectively stronger. But individually each country has an incentive to defect: Germany, to protect its trade with China; Ireland, to safeguard its income from the tech platforms; and Poland, to avoid risking its security alliance with Washington.

The result, as the theory predicts, is a suboptimal Nash equilibrium: all end up worse off than if they had cooperated and each Member State, believing that it was protecting its own interests, is more exposed to bilateral coercion.

5.2 The fundamental theorem: cross-compensations

Game theory posits that coalitions are durable and credible when the winners are prepared to compensate the losers. If we conducted this exercise by taking each vulnerability in turn, the number of compensations required would be unfeasible. By addressing the vulnerabilities in a comprehensive way, however, taking advantage of the fact that the pain thresholds vary enormously between countries and dimensions, the net number of compensations required plummets.

A country like Poland, with a high threshold regarding China (0.60) but a low threshold regarding the US (0.15), may accept a trade dispute with China if it receives credible guarantees that its defensive vulnerability will be covered by a European defence mechanism. France, with high thresholds regarding both adversaries, is the main beneficiary of a more autonomous Europe and may finance compensations for the most exposed. The intersection of vulnerabilities allows cross-compensations that drastically reduce the net cost.

In simple terms, this is the fundamental theorem of welfare economics applied to geopolitics: a change of policy benefits the whole if the total gains exceed the total losses and if there are credible transfer mechanisms. That being said, it is essential to note that in the absence of this second condition, the credibility of the compensation, the first is irrelevant. Put another way: the alternative to the integrated approach is to remain in a suboptimal Nash equilibrium, exposed to the bilateral coercion of the two hegemonic powers who are playing negative-sum games.

Draghi has termed this approach pragmatic federalism: taking the steps that are currently possible, with the partners that are currently willing, in the contexts where progress can be made.

The euro is the most successful example: those who were willing made progress, built joint institutions with real authority and, by means of this shared commitment, forged a deeper solidarity than any treaty would have contrived. Since then, nine more countries have chosen to join.

The financial proposal: Eurobonds to the value of 25% of GDP

6.1 The real battleground: financial sovereignty

Dwelling on the tariffs war or contributions to NATO means only partly tackling the underlying problem. Behind every US dollar of international trade there are US$7 of financial transactions. The US can do what it is doing because it is the hegemonic power of the global financial system: 80% of all international financial transactions are conducted in US dollars. The US’s real power of coercion does not reside in tariffs but in its control of the financial system.

The market in German bunds represents less than 10% of the market in US treasuries: €2.5 trillion as opposed to US$30 trillion. The Eurobonds already issued as part of the Next Generation EU (NGEU)programme, the European Stability Mechanism (ESM) and the European Investment Bank add up to slightly more than €1 trillion.

In conclusion, Europe simply lacks a financial instrument of sufficient scale to constitute a credible alternative to the US dollar.

6.2 Design of the Blanchard-Ubide proposal

The proposal, published by the Peterson Institute for International Economics, involves replacing 25% of EU countries’ GDP with Eurobonds, equivalent to approximately €5 trillion. It is not an instrument for increasing spending or indebtedness: it is a restructuring of existing debt designed to reduce financing costs for all Member States.

The mechanism operates via two complementary pathways:

• Exchanging existing national debt with Eurobonds.
• Refinancing national debt as it matures in the future with issues of Eurobonds.

In practice there is no physical exchange of certificates, only a programme of simultaneous purchases and emissions by a European agency.

The Eurobonds would be backed by a twofold guarantee. First: a legislative undertaking on the part of each Member State to transfer a percentage of its VAT revenues to the EU, which could represent around 1% of the EU’s GDP. Secondly: the EU’s legal commitment as the issuer to service its debt. Eurobonds would de facto be a super-senior asset: default would be the equivalent of a political default of the EU, something qualitatively distinct from and with a reputational cost incomparably greater than a default on national debt.

6.3 What the proposal is NOT

Three fundamental aspects distinguish this proposal from previous attempts that foundered. First: it is not proposed to direct the Eurobonds towards specific spending programmes, unlike the schemes linked to financing new policies. Secondly: there is no proposal to increase either debt or deficits to exceed the already-existing consolidation plans; in other words, the fiscal and budgetary framework approved in April 2024 regarding the reform of the Stability and Growth Pact.[2] Third: no ‘joint and several’-type solidarity guarantee is required of Member States in the way that it was in Delpla and Weizsäcker’s original Blue/Red proposal.

What it does propose is optimising the management of debt to satisfy the new global demand for safe European assets and reducing the cost of all countries’ financing, both public and private. The goal is for Eurobonds to attain the status of beta negative, which is to say that when there are upheavals in the global share markets, the market price of the Eurobond rises and therefore its interest rate falls; a beta negative trait such as US treasuries consistently exhibited until not very long ago.[3] Ensuring, in other words, that Eurobonds become a safe-haven asset.

Having a safe-haven asset that rises in price when the market falls would provide the EU with anti-cyclical stability and create a deep and liquid yield curve for Eurobonds that would aid and stabilise the European corporate market. It would constitute awin-win for both the private and public sectors.

6.4 Why 25% of GDP?

The choice of 25% reflects a balance between two forces. On the one hand, a large-enough volume of bonds would create a deep and liquid market and would attain the critical mass needed to ensure that the investments in market infrastructure are made (derivatives, repurchase agreements and futures) and that Eurobonds are included in sovereign indices. On the other hand, this volume –€5 trillion– would ensure the assignment of national tax receipts to ensure the solvency and servicing of the Eurobonds was not excessive, something that in present circumstances is desirable given the fiscal stress and high effective rates of fiscal effort exhibited by many European countries. Countries with a low debt/GDP ratio could create a ‘coalition of the willing’, increasing their swaps of national debt for Eurobonds, replicating the aforementioned logic for compensatory coalitions amid geopolitical vulnerabilities.

6.5 Why now? Three convergent reasons

Need: strategic autonomy does not rest solely on military capability; it requires financial strength. Without a safe European asset, financing any defence initiative or supporting allies depends on the financial system denominated in US dollars; in other words, on the tacit consent of Washington.

Opportunity: recent empirical evidence confirms that the window of opportunity is real and quantifiable. Hanno Lustig at the University of Stanford has shown in his analysis titled ‘The safe assets that weren’t’ (February 2026) that US treasuries are losing their status as a safe asset. The treasury basis –the premium that investors paid for real US treasuries as opposed to synthetic versions constructed on the sovereign bonds of the G10– has disappeared and has even been inverted over long timeframes: US treasuries maturing in five-10 years are already being quoted at a discount. More significantly, the flight-to-safetymechanism has ceased to function: as already pointed out when discussing the beta negative status of US bonds, in March 2020 (COVID) and again in April 2025 (Trump tariffs) investors sold US treasuries rather than buying them and the US dollar fell while yields rose. This trend is diametrically opposed to the historical pattern. As Lustig points out, citing the Belgian economist Robert Triffin, in order to supply sufficient safe assets to the world, the US has fiscally over-extended itself. The rest of the world has US$21 trillion in US dollar-denominated safe assets and is starting to question whether they really are safe. This unsatisfied demand is exactly what a profound Eurobond market could capture.

Institutional backing: the ECB has moved from a neutral position regarding the international role of the euro towards an actively promotional position, as shown by Christine Lagarde’s speech in Berlin on 26 May 2025. The euro cannot aspire to being a benchmark international currency without a safe asset of the scale and liquidity that only Eurobonds can provide. And without such an asset it is impossible to conceive of the development of euro-denominated stablecoins that compete in the digital payments ecosystem with US dollar-denominated versions, or, in the medium term, with their foreseeable Chinese digital alternatives.

The nexus between Eurobonds and compensatory coalitions

The connection between the financial instrument and the geostrategic framework is not incidental; it is inherent. Eurobonds to the value of 25% of GDP fulfil a threefold function that no other instrument can replicate.

First, they create a safe asset that acts as an alternative to the US dollar and that global investors seek, reducing the costs of financing throughout Europe and, by extension, for private European capital. A profound and liquid Eurobond yield curve would sustain a European corporate market of a scale needed to compete with its US counterpart.

Secondly, they provide the mechanism of credibility for the cross-compensations that make the coalitions of the willing viable. With a financial instrument on this scale, the promise to compensate the losers from reforms that seek more autonomy ceases to be rhetorical and becomes an undertaking backed by flows of real capital. If Ireland is obliged to accept measures that irritate Washington, the financial compensation through verifiable reductions in its financing costs becomes tangible and quantifiable.

Third, they strengthen financial autonomy, without which no other form of autonomy is sustainable. Autonomy in energy, technology and defence requires massive investments that, without financial sovereignty, will rely on a system denominated in US dollars; in other words, on the consent of the hegemonic power whose coercion is being resisted.

The financial proposal and the geostrategic framework are mutually self-reinforcing. Without the analysis of vulnerabilities and pain thresholds, Eurobonds would seem a technical exercise in debt optimisation. Without Eurobonds, the geostrategic diagnosis would lack the instrument that renders it politically viable.

The reformist triad: Letta-Draghi-Blanchard/Ubide

A notable convergence has emerged in the ecosystem of European thought involving three diagnoses and proposals that, taken together, constitute a coherent reform programme. First is the Letta Report, which proposes defragmenting the single market in order to gain scale, eliminating the barriers that hinder European companies from attaining the size needed to compete globally. Secondly is the Draghi Report, which proposes defragmenting investment to gain productivity, identifying a gulf in annual investment of various hundreds of thousands of millions, which explains the difference in growth compared with the US. Last is the Blanchard-Ubide proposal, which suggests defragmenting public debt to reduce financing costs, creating the financial conditions that would make the two preceding reforms viable. The three elements stand in mutual need of each other.

A more integrated single market generates the trade flows that justify the scale of the Eurobonds. Defragmented investment generates the growth that backs the sustainability of joint debt. And liquid Eurobonds provide the competitive cost of capital that makes investment profitable and the single market attractive. It is a virtuous equilibrium whose activation requires a coordinated political push.

Draghi closes his argument with a formulation that makes a direct connection with the foregoing analysis of coalitions: unity does not precede action; it is forged by taking consistent decisions together on the basis of the shared experience and solidarity that are created and realising that we can bear the consequences. Whenever the EU has moved towards federation –in trade, competition, the single market and monetary policy– it is respected as a power. Whenever it has not done so –in defence, industrial policy and foreign affairs– it is treated as a scattered collection of mid-sized states.

Reactions and debates

9.1 Institutional support

The Blanchard-Ubide proposal has generated considerable debate since its publication in May 2025. In the institutional realm, the most significant backing has come from the ECB. Philip R. Lane, member of the Executive Board, explicitly discussed the proposal in his intervention at the Government Borrowers Forum in Dublin in June 2025, singling it out as a specific pathway for broadening the offer of euro-denominated safe assets. Lane said that while there is an inherent trade-off in the scale of the issue, setting it at 25% of GDP would represent an appropriate balance between the liquidity of the new instrument and the preservation of national fiscal sovereignty.

The change of the ECB’s stance on the international role of the euro, passing from neutrality to active promotion, provides unprecedented institutional backing. As Ubide emphasised to Bloomberg, the euro cannot function as a true international currency without a safe asset comparable in scale and liquidity to US treasuries. The ECB seems to have absorbed this reasoning.

In the academic and think-tank community, the CSIS has described the proposal as the most integrated for ensuring that Germany and Europe leverage their monetary power, observing that the German fiscal reform of March 2025, which broke with decades of constitution-bound ordoliberalism, opens a window of opportunity for Berlin to accept an emission of Eurobonds on this scale.

Hanno Lustig’s analysis of the US treasuries’ loss of status as a safe asset provides an additional empirical foundation: if Europe manages to issue Eurobonds with the fiscal discipline that the US has lost –backed by specific revenues and with no unfunded fiscal expansions– it could restore the beta negative property that US treasuries have forfeited, becoming the only large-scale sovereign asset that offers genuine anti-cyclical protection.

9.2 Objections and nuances

The main objections come from three sources. The first is the traditional argument of moral hazard, historically predominating in Germany and the frugal countries (the Netherlands, Austria and the Nordic countries).

The objection argues that mutualising debt would reduce the incentives for fiscal discipline in the most indebted countries. Blanchard and Ubide counter this by arguing that the proposal is not a ‘mutualisation’ in the strict sense: Eurobonds are backed by specific revenues (VAT), not by undertakings of solidarity, and do not add to total debt. Moreover, the coexistence of national debt and Eurobonds generates a two-level system where the spreadof the national bonds acts as an incentive to fiscal discipline, similar to the effect of abundant reserves on banking discipline.

Lorenzo Bini Smaghi, former member of the ECB’s Executive Board and current chairman of Société Générale, has pointed out an important detail: Eurobonds can serve to finance new expenditure or to create a safe asset, but it would be hard to achieve both ends simultaneously. According to his analysis, the safe-asset goal requires an instrument of approximately €5 trillion, a figure that coincides with the Blanchard-Ubide proposal, but the financing of European public goods would also require a European budget supplemented by its own resources. Bini Smaghi has also suggested that the ESM, with more than €600 billion in capital at its disposal, could be the issuance vehicle acting as an alternative to the European Commission.

The second type of objection comes from those who argue that increasing the scale of bond issues does not resolve the fundamental problem: that EU bonds are listed as supranational, not as sovereign and are therefore not included in indices of sovereign debt. A recent analysis drawn up by CEPR/VoxEU shows that the spread of EU bonds over German bunds has averaged 50 basis points since 2022, even exceeding Spain’s spread, despite having a much higher rating. The argument is that only a change in the classification, from supranational to sovereign, would narrow the spread, regardless of the volume. The Blanchard-Ubide proposal counters that the critical mass of the bond issue, combined with the certainty regarding future issues and their inclusion in ECB purchase programmes, would force precisely such a reclassification.

The third source is political-institutional: the legal viability of an exchange that bestows seniorityon Eurobonds over existing national debt. Blanchard and Ubide acknowledge this issue, but note that the already existing EU bonds are backed by national contributions to the EU budget and are de facto senior, with no legal challenges having been triggered. Moreover, they propose an operating mechanism (purchases of national debt with simultaneous emissions) that avoids a direct formal exchange.

9.3 Favourable political context

The European Parliament, through its EGOV department, has analysed the proposal as part of a wider study of the international role of the euro. The report acknowledges the logic of the proposal, but counsels, taking its lead from the German Council of Economic Experts, about the need for any progress on mutuality to be accompanied by progress on fiscal discipline and on the rupture of the sovereign-banking nexus.

However, the political context has changed considerably since the 2010s.

The German fiscal reform of 2025, which partially lifted the constitutional debt brake to enable massive expenditure on defence and infrastructure, has broken a taboo that had seemed sacrosanct. The NGEU precedent during the pandemic showed that the issuing of joint debt is viable when the urgency justifies it. And the growing perception of an existential threat, whether from Russia or from the US’s tariff policy, is creating the necessary political pressure to ensure proposals that would have been rejected outright five years ago now receive serious consideration.

9.4 The chicken and the egg

Blanchard and Ubide’s proposal relies on a risky hypothesis: if a sufficient volume of Eurobonds is issued, the continuity of future emissions is guaranteed and the backing of the ECB is secured by their being included in its purchase programmes, then markets will end up treating them as safe assets, forcing the ratings agencies, index providers and portfolio managers to reclassify them at the same level as German bunds and US treasuries. In short, the mere fact of offering the asset will ensure that the Eurobond is treated as a safe asset.

9.5 But what if they are wrong?

US treasuries and the US dollar did not become the global safe asset that they are today because Alexander Hamilton designed them well, but because there was a detailed institutional design that enabled the emergence of a solid federal fiscal capability, a single treasury with its own tax-raising powers and because it was unequivocally demonstrated that the system was capable of overcoming successive crises as they arose.

At the end of the 18^th century the new federal state lacked a consolidated fiscal capability, a truly unified treasury or a tax-raising power that could be regarded as credible. The debt incurred by the War of Independence was fragmented between various levels of government and had been negotiated with major discounts, a sign of the lenders’ distrust of the federal government’s ability to meet its commitments. Hamilton’s reforms laid the foundations for a federal fiscal architecture, but their credibility was not established by the mere fact of their being adopted.

The assumption of state debts by the federal government, far from being a simple exercise in accounting, constituted a high-risk political commitment that tied the financial survival of the new state to its ability to raise its own revenues and successfully service its debt on a regular basis. This commitment was almost immediately tested. The financial panic of 1792 revealed the fragility of public debt markets and the coordinated response of the Treasury, acting as a de facto stabiliser of the financial system, established the precedent that the federal government would not allow the market in its own liabilities to collapse.

Shortly afterwards, the Whiskey Rebellion showed that fiscal capacity was not only an administrative issue but also a matter of coercion. The decision to enforce an unpopular federal tax using military might confirmed that revenue-raising would not depend on either the voluntary acquiescence of taxpayers or of the states, but rather on a central authority willing to impose it. Meanwhile the shocks caused by the European wars of the 1790s subjected the fledgling republic to significant external tensions, with repercussions for trade and the taxable base, without this translating into payment suspensions or an erosion of the real value of the debt.

Throughout this succession of financial, fiscal, political and geopolitical crises, the US federal system was garnering a reputation for compliance under adverse circumstances. The safety of the asset was not something it had from inception but rather an emerging by-product of repeatedly demonstrating that the federal state had a single treasury with its own tax-raising power and the political and institutional capacity to defend both amid conditions of stress. In this respect, US treasuries and the US dollar became safe assets because the institutional latticework that supported them was capable of overcoming and adapting to successive crises without breaking the fundamental promises upon which lenders’ trust resided.

The proposal seems to be suggesting that Europe could skip this entire intermediate phase –which was long and hard– and go straight to the end of the story. The Eurobond proposal aspires to creating credibility ex ante through institutional design, without having navigated a comparable sequence of crises that are dealt with in a consistent way at the federal level.

The problem is that financial markets do not wait for institutional architectures to mature. Their logic is neither pedagogical nor patient, but rather immediate, often implacable. From the very moment that an instrument comes into existence, the markets start to test the solidity of the guarantees that support it and the political cohesion of the institutional framework on which it depends. During this phase –which may be fleeting or last for years– the Eurobond market will operate as a large-scale laboratory. The first test will be almost mechanical: the market’s assessment of the guarantee structure surrounding the new asset. If Eurobonds persistently trade at a positive and significant spread compared with the bund, such a premium will reflect not only financial risk but also a fundamental doubt as to the credibility of the EU’s institutional edifice as a whole. A supposedly joint asset that fails to match a predominant national benchmark would by definition undermine the narrative of irreversibility that its supporters hope to use as the basis for construction.

Here there is an additional risk of a diabolical feedback loop. Currently, the perverse relationship between sovereigns and banks operates fundamentally through national bonds. The advent of Eurobonds trading at a discount could create a negative feedback mechanism of a new kind. If bank balance sheets increasingly incorporate the new European ‘safe asset’, which then loses value in situations of stress, the erosion of confidence would quickly transfer to the financial market.

There is also a potential trap for the ECB. Including Eurobonds in the ECB’s purchase programmes would convert monetary policy de facto into the ultimate backstop of fiscal integration. Such a development could open only two possible pathways. If it works, the act of mutualising debt will have come about by an indirect route, without any corresponding or explicit political or fiscal anchorage. If it fails, the price will be paid by the balance sheet and independence of the ECB, probably the EU institution with the greatest stock of accumulated credibility. In both cases the systemic risk is considerable. Lastly, the markets will put the political commitment to the test. The first major crisis –the election of an openly populist government in a large Member State or a serious conflict surrounding fiscal rules– will be the chance to check whether the commitment to Eurobonds is truly irrevocable or whether, if push comes to shove, it is liable to crumble.

The EU experience offers clear precedents. The crisis afflicting the European Monetary System in September 1992 showed the extent to which the markets are capable of shattering commitments that political leaders believe to be binding, but that lack fully credible institutional backing.

None of the above should be interpreted as a rejection of the proposal. On the contrary: it is the best and most developed proposal that Europeans have tabled for some time. The problem is not the Eurobond per se so much as the hypothesis that the mere offer of the instrument could replace the credibility that is only acquired through demonstrating fiscal strength, political cohesion and institutional resilience under pressure. The ‘egg’ can help to create the ‘chicken’, but only if mechanisms are introduced that reproduce, in a credible way, whatever it is that has historically ensured the safety of other assets.

This entails equipping Eurobonds with explicit safeguards: clearly defined fiscal back-ups, automatic adjustment rules that do not rely on ad hoc negotiations and irreversibility clauses that reduce perceptions of political risk to a minimum. Without such elements, the new asset would not absorb systemic risk but instead make it visible and amplify it.

Ultimately the argument is more structural than circumstantial. A safe asset is not simply a well-designed financial instrument; it is a political institution distilled into a certificate. If the certificate fails, the institution is left exposed. And if the institution is incomplete, the certificate becomes an immediate manifestation of its weaknesses. This explains why markets do not offer learning periods: they read prices as judgements on the underlying political architecture. Put another way, the proposal is not a matter of financial engineering but rather one of state construction under conditions of stress. If the goal is for the Eurobond to herald the arrival of European integration, it is essential to treat it as such and not as a shortcut. Its success will depend not so much on the initial announcement as on the dimension of the reforms, the clarity of the political commitment and the EU’s capacity to demonstrate, prior to and during its introduction, that it can sustain the system when the first major acid test inevitably arrives.

Conclusions

1. The international order has undergone a structural upheaval that demands new instruments, not incremental adaptations. Europe inhabits a world where the hegemonic powers instrumentalise interdependency as a mechanism of coercion and where transactional power has replaced normative power.

2. European vulnerabilities in energy, technology, defence and finance are multiplicative, not additive. Segmented analyses lead to misdiagnoses and ineffective strategies. Up to 70% of EU countries would undergo an extreme shock if hegemonic coercive threats became a reality.

3. The extreme heterogeneity of national pain thresholds, combined with the qualified majority voting system, creates a structural paralysis that is confirmed by quantitative analysis: no coordinated response scenario against China is viable and only two minor scenarios against the US are viable.

4. Game theory shows that only coalitions with credible cross-compensation mechanisms can escape the current suboptimal Nash equilibrium. An integrated approach to the vulnerabilities, exploiting the asymmetry of pain thresholds, drastically reduces the net cost of these compensations.

5. Issuing senior Eurobonds equal to 25% of EU GDP, around €5 trillion, simultaneously provides a safe asset as an alternative to the US dollar, the credibility mechanisms for cross-compensations and the cornerstone of financial autonomy. The proposal increases neither debt nor the deficit but rather reorganises the existing structure, backed by VAT revenues equivalent to 1% of GDP.

6. The convergence of the Letta (defragmenting the single market) and Draghi reports (defragmenting investment) and the Blanchard-Ubide proposal (defragmenting debt) constitutes a coherent reform programme whose elements are mutually reinforcing.

7. The institutional reactions have been notably positive. The ECB has transitioned towards the active promotion of the euro. Philip R. Lane has explicitly discussed the proposal as a specific pathway. Germany’s 2025 fiscal reform and the NGEU precedent show that jointly issued debt is politically viable when the urgency justifies it.

8. Legitimate objections regarding moral risk, supranational classification and legal viability can be met with solid technical responses but will require work on institutional design that needs to start immediately. Olivier Blanchard and Ángel Ubide suggest setting a deadline of 1 January 2028. There will be no action unless a date is set.

9. The window of opportunity is now. Global investors are querying the stability of the US dollar and seeking alternatives. Missing this historic chance to create a European safe asset on a global scale would involve accepting higher financing costs, a more unstable economy and, ultimately, renouncing strategic autonomy.

10. Mark Carney is right: the time to take down the sign from the shop window has arrived. Mario Draghi is also right: power requires transitioning from confederation to federation. But no strategy will be viable unless it rests on actively defending the principles of liberal democracy. European integration is constructed differently: not on the basis of force but on the basis of common will; not on the basis of subordination but on the basis of shared benefits. What started amid fear, as Draghi said, should continue amid hope.

11. The Eurobond proposal should not be interpreted as a financial shortcut but as an institutional construction project. History shows that truly safe assets are not created by decree or exclusively by the volume that is issued, but that they emerge when there is credible fiscal capability, unequivocal political backing and a demonstrable track record of resilience amid crises. Europe needs Eurobonds, but it needs them to work. Issuing them without sufficient safeguards would be the equivalent of placing a high-risk bet on the credibility of the entire European project.

Eurobonds can contribute to creating the conditions of their own success, but only if they are accompanied by explicit mechanisms that credibly replace the historic tests that other assets have overcome: clearly defined fiscal backing, automatic adjustment rules, irreversibility clauses and a political commitment capable of withstanding the first major crisis. Without such elements, the new instrument would highlight and amplify systemic risk rather than absorb it. Ultimately, a safe asset is not merely a well-designed financial instrument; it is a political institution distilled into a certificate. If the institution is incomplete, the certificate exposes it. The debate about Eurobonds is thus not a technical question but a strategic decision about the dimensions, sequence and depth of European integration. The success of the project will depend less on the initial announcement than on the EU’s capacity to demonstrate, before and during its introduction, that it is capable of sustaining the project when the first great stress test inevitably arrives.

[1] A 95% dependency on China for rare earths; a vulnerability to the supply of Russian gas that, although it has fallen from 40% to 15% as an EU average in 2024, is still critical in Central and Eastern Europe, and a 90% dependency on advanced microchips from Taiwan.

[2] The reform of the Stability and Growth Pact, which came into force in April 2024, is the most significant change in European fiscal governance since the global financial crisis. The Maastricht Treaty thresholds remain unchanged –a maximum deficit of 3% of GDP and a debt benchmark of 60%– but the mechanism for attaining them has changed radically. The nucleus of the new system comprises the medium-term fiscal-structural plans, national documents covering four-to-five years that combine fiscal trajectories, structural reforms and investment priorities. The European Commission draws up benchmark technical trajectories specific to each country, based on a debt sustainability analysis, but the Member States can diverge if they justify their alternatives with well-founded economic arguments. The central operating indicator becomes the net spending pathway –total spending minus interest, programmes paid for by EU funds, the cyclical component of unemployment and one-offs– replacing the previous maze of partly contradictory metrics. The standard period of adjustment is four years but can be extended to up to seven years if the Member State commits to reforms and investments that improve the potential for growth and fiscal sustainability. Seven countries –Austria, Belgium, Finland, France, Italy, Romania and Spain– have requested this extension. The Commission monitors fulfilment using a ‘control account’ that records accumulated discrepancies: if these exceed 0.3% of annual, or 0.6% of accumulated, GDP the Excessive Deficit Procedure may be triggered. Nine countries are currently subject to this procedure: Belgium, France, Hungary, Italy, Malta, Poland, Romania and Slovakia, which were joined by Austria in July 2025. The framework includes escape clauses –one general at the EU level and another national– which allow temporary divergences of up to 1.5% of GDP for a maximum of four years for extraordinary expenditure. In March 2025 the Commission invited Member States to activate the national clause to finance defence spending under the Readiness initiative.

[3] The recent exceptions were the critical moment of the pandemic and Trump’s Liberation Day. In both cases, the bond fell in unison with Wall Street.

La entrada Eurobonds for European strategic autonomy: a financial proposal with geostrategic foundations se publicó primero en Elcano Royal Institute.

Applicants will have to prove that they do not have a criminal record and have lived in Spain for at least five months –or have sought international protection– before 31 December 2025. The permit will be valid for a year –or five in the case of children– and renewable. After 10 years these migrants will be eligible to become Spanish citizens. They will not be eligible to move to other EU countries and work there legally until they have permanent residency in Spain.

While the government puts the number of undocumented immigrants at 500,000, the National Centre for Immigration and Borders (CNIF), part of the National Police, estimates that between 750,000 and one million illegal migrants currently living in Spain may apply for legal status.

The regularisation process is the seventh in the past 40 years (see Figure 1). Ending on 30 June, it began as a citizen-led initiative presented to parliament in 2024, signed by more than 700,000 people, endorsed by around 900 non-governmental organisations, including the Roman Catholic Church, and supported by business associations and trade unions.

Figure 1. Regularisations of undocumented migrants,1986-2026

Although two of the previous regularisations were granted by Popular Party (PP) governments, the PP and the hard-right VOX oppose the move. The fact that the law ordering the regularisation was issued by decree (a process that is supposed only to be used in exceptional, emergency circumstances) suggests the Socialist-led minority coalition government, which relies on Basque and Catalan parties for parliamentary support, did not believe it could win a majority for it in the legislature.

In the first electoral test since announcing the regularisation, the Socialists lost a fifth of their seats in the Aragón parliament in last month’s regional election, falling from 23 to 18 (24.3% of the votes), while the anti-immigration VOX doubled its seats from seven to 14 (17.9%). The Popular Party (PP), which governs the region, won 26 seats, two less, on 34.3% of the vote, well short of a majority in the 67-seat chamber. Aragón is known as ‘Spain’s Ohio’ because, like the US state, it tends to serve as a barometer of the national electoral mood.

VOX has been campaigning throughout Spain against the regularisation under the slogan: ‘Not a single one more’. Surveys by the state pollster CIS show immigration is one of the main concerns after the housing shortage (20.3% of respondents in the February survey compared with 42.8% for housing).

Foreign workers have become a critical lever for Spain’s economic growth in recent years, enabling expansion to outpace that of most EU counterparts. As a result of a rapidly ageing population and a fertility rate well below replacement, Spain needs migrants to keep the economy growing, fill job vacancies and keep the finances of the public health and pension systems afloat.

The surge in Spain’s population over the past 50 years to almost 50 million (from 36.1 million in 1976) is almost entirely due to net international migration, particularly in the last decade. The foreign-born population surpassed 10 million in 2025 for the first time, just over 20% of the total population.

The non-EU community almost doubled between 2017 and 2025 to 4.8 million (see Figure 2); there are more Latin Americans in Spain than in the rest of the EU combined. Only two countries (Ecuador and Bolivia) in South and Central America need visas to come to Spain; most come as supposed tourists and stay.

Figure 2. Non-EU population in Spain, 2017, 2022 and 2025

The Prime Minister, Pedro Sánchez, also regards a welcoming stance on migrants as a moral duty. More than two million Spaniards emigrated between 1960 and 1973. ‘It is our duty to become the welcoming and tolerant society that our own relatives would have hoped to find on the other side of our borders’, he wrote in the New York Times.[1]

More than 3 million foreigners were affiliated to the social security system at the end of 2025 (14.1% of the total). That number should substantially increase after the regularisation as it will enable more migrants to be legally employed and hence contribute to social security and pay taxes, and generally enjoy the same rights as everyone else.

Critics of the regularisation, such as Christopher Cauldwell, the conservative US journalist, in response to Sánchez’s article, say the measure risks stoking a populist reaction of the sort that has risen in France and Germany.[2] The hard-right party Alternative for Germany (AfD), founded in 2013, two years before Germany took in around one million Syrians, doubled its number of seats in the Bundestag in the 2025 election to 152 out of 630, while VOX has 33 of the 350 seats in Spain’s parliament.

The regularisation comes at a time when Spain’s unemployment rate is just under 10%, for the first time since the country’s 2008 real-estate crash and the global financial crisis. The rate, however, is still well above the average EU rate of around 6%. Given that immigration has been made necessary by a labour shortage, Cauldwell said the still high rate suggests there is a labour surplus.

Opinion polls show VOX gaining ground and the PP could need its support if, as seems likely, it is the most voted party in the next general election (due by August 2027) but does not have sufficient seats in parliament to form the next government.

Spain has been very successful so far in integrating a very large number of immigrants that have arrived over a relatively short period. More than half of them come from Latin America and bring with them the Spanish language (apart from Brazil) and, generally, the Roman Catholic religion.

There is, however, a growing problem of disparity between the educational attainment and living conditions of native Spaniards and immigrants, including those who have become nationalised Spaniards. While, for example, the early-school leaving rate of Spaniards aged 18 to 24 dropped from 16.4% in 2016 to 9.8% in 2025, that of foreigners is still over 30% (see Figure 3). This is enlarging an underclass.

Figure 3. Early school leavers, Spaniards and foreigners

Low educational attainment generally limits employment prospects; in 2024 a quarter of foreigners had menial jobs, such as cleaning, performing basic maintenance in residences, hotels and offices, as well as simple tasks in sectors like food preparation, agriculture, mining, construction and garbage, while only 10% of Spaniards had such jobs, according to the Consejo Económico y Social.

Close to 20% of the total foreign-born population lived in overcrowded conditions in 2024, almost four times higher than Spaniards (see Figure 4) and 29% of that population were behind in payments for their accommodation compared with 9.2% of Spaniards.

Figure 4. Percentage of people living in overcrowded conditions by country of birth

The monetary poverty risk rate of non-EU foreigners was 47.8% in 2024, four times higher than the rate for Spaniards. The widening gap between Spaniards and immigrants is a potentially explosive problem and needs to be narrowed so that society is more cohesive.

The surge in Spain’s population –by far the fastest growing among the EU’s five largest countries (+39.4% since 1976)– is also accentuating the gulf between rural and urban Spain. Up to 90% of the population live in 3% of the territory, one of the highest population concentrations in Europe. Efforts to attract migrants to what is known as ‘emptied-out Spain’ have borne little fruit.

The regularisation will take a significant number of immigrants out of limbo. Yet the fact that more than 1.7 million have benefited from these processes, including the latest one, over the past 40 years –and it might not be the last– exposes the need for much greater migratory policy planning.

[1] Available at https://www.nytimes.com/2026/02/04/opinion/spain-migrants-europe.html.

[2] Available at https://www.nytimes.com/2026/02/12/opinion/spain-amnesty-immigration.html.

La entrada The seventh regularisation of undocumented migrants in 40 years exposes the need for greater migratory policy planning se publicó primero en Elcano Royal Institute.

From Riyadh to Abu Dhabi, from Baghdad to Beirut, previously contained disputes now collide, creating a sprawling theatre of war that threatens to envelop the entire region. For the first time, the Gulf states are fully drawn in and this conflagration, ignited by US and Israeli strikes on Iran and Tehran’s sweeping retaliatory campaigns, could become the Middle East’s own Great War in which multiple conflicts converge and the regional order is irreversibly reconfigured.

It is a fragmented, multi-player struggle where influence, ideology and survival intermingle, making escalation harder to curtail.

To understand how unprecedented this is, it helps to look back. The region’s conflicts in the 20^th century, though brutal, were far more conventional. The Arab-Israeli wars between 1948 and 1973 saw Egypt, Jordan and Syria facing off against Israel in largely state-on-state combat, with clear frontlines and armies. The Iran-Iraq War (1980-88) unfolded as a gruelling, attritional struggle, marked by trench warfare, mass casualties and prolonged stalemate, emerging as the longest conventional war in the 20^th century. Iran’s then newly formed Islamic Republic fought that war alone, with no international allies, while the USSR, the US and France, along with all the Gulf states aided Saddam Hussein’s Iraq. Later, the Gulf Wars of 1991 and 2003 pitted Iraq against the US-led coalitions, relying on firepower and technologically advanced militaries. These conflicts were primarily battles between nation-states with defined combatants.

US President Donald Trump promises this conflict will end in the ‘four weeks’ he has predicted. But the current conflict should already be recognised as the US’s third Gulf War. Four weeks is a long time for a Middle-Eastern war. The 1991 Gulf War lasted six weeks, and the 2003 Iraq War concluded in less than a month. Nevertheless, the last war did not really end when George W. Bush declared ‘Mission Accomplished’ on a carrier off the coast of San Diego, as insurgency broke out and the Islamic State, a terrorist group that still exists today, emerged. The unintended consequences of this Third Gulf War are already dire and could easily escalate into a wider regional Great War involving non-state actors.

This is because the evolution of regional rivalries complicated the picture. During the Arab Cold War of the 1950s through the 1970s, states like Egypt under Gamal Abdel Nasser squared off against Saudi Arabia, Jordan, Syria and Iraq, often through direct interventions, most famously in Yemen, while battles remained largely between governments. Today, however, the ‘cold war’ has changed. Iran and Saudi Arabia vie for dominance through proxies, with Egypt playing a more peripheral role. Militias, armed factions and other non-state actors now fight on behalf of external powers, turning the battlefield into a complex web of asymmetric warfare. The conflict is no longer defined solely by borders and armies. It is a fragmented, multi-player struggle where influence, ideology and survival intermingle, making escalation harder to curtail.

The most recent eruption underscores how these proxy networks operate in practice. On 7 October 2023 Hamas launched a large-scale attack on Israel, prompting swift military responses from both Israel and the US. Tehran was widely blamed for orchestrating the assault, despite no conclusive evidence of direct orders. This is a hallmark of 21^st century proxy warfare, where influence is exerted through intermediaries rather than formal armies. The dynamic recalls the Lebanese Civil War, when multiple states backed factions within a single conflict. Still, today’s crises span far wider geographies and inflict unprecedented destruction. From Libya to Yemen, Syria to Iraq and Gaza to Israel, the human and economic toll has been immense.

The spectre of a ‘Great War’

Taken together, these overlapping crises evoke the spectre of a ‘Great War’ in the Middle East, reminiscent of Europe’s world wars, where separate conflicts intertwine across the region, creating a vast and chaotic theatre of combat. The stakes have never been higher. The Gulf states are fully engaged and urban centres have become combat zones, placing civilians directly in harm’s way. The array of actors is equally diverse, from militias to monarchs, sheikhs, military commanders and presidents, many of whom remain cautiously taciturn, waiting to see where the chips may fallas the regional balance shifts.

In addition to conventional and proxy battles, the conflict increasingly reflects elements of 5^th generation warfare, where frontlines are blurred and the war extends into cyber, media and social networks. Social media, influencer content and AI tools accelerate the spread of disinformation and propaganda, skewing perceptions, inflaming sectarian tensions and obscuring the truth about attacks and casualties. Deepfakes, AI-generated imagery and misleading narratives allow rival actors to project influence beyond traditional battlefields, complicating responses by civilians, regional leaders and external powers alike. The digital and informational battlefield has become just as consequential as the physical one.

Against this backdrop, traditional institutions such as the Arab League and the Gulf Cooperation Council face an enormous strain, with their relevance and capacity to mediate the conflict put to the test. They may not withstand the pressure, and their ability to endure is increasingly uncertain as the region’s political architecture is reshaped.

The Middle East today may be witnessing its first ‘Great War,’ where overlapping conflicts, proxies and rivalries intersect across borders and cities. Like Europe’s world wars, this maelstrom could either entrench divisions for generations or lay the foundation for a new order of coexistence. Its conclusion may produce a regional equivalent of the Treaty of Versailles, a comprehensive agreement redefining borders, political authority and mechanisms for managing disputes, or a charter for an organisation capable of sustaining peace. In the end, the region will either descend into intractable chaos or finally achieve what has so far remained elusive, a durable peace.

Tragically, the former seems more likely. Whereas the Paris Peace Conference benefited from a US President, Woodrow Wilson, genuinely aiming to create the League of Nations and secure lasting stability, the current constellation offers no such vision. With his transactional instincts and unpredictability, the current US President may be the ‘trump card’ in this scenario. Some analysts speculate that regional chaos and disorder might, paradoxically, align with certain strategic aims. A fragmented landscape can empower select actors while undermining systemic constraints. In this context, the Middle East may be drifting towards a scenario where disorder is not merely a byproduct but, for some, a calculated feature of the regional order.

La entrada The Middle East enters its first Great War: a new order could emerge se publicó primero en Elcano Royal Institute.

• Trump’s second-term immigration agenda is a systemic contraction of legal immigration to the US, relying on executive authority to limit access to temporary and permanent immigration, humanitarian protection and temporary legal pathways.
• Permanent visas for wealthy investors and temporary visas for seasonal farmworkers are two of the few areas in which Trump is seeking to expand access.
• Trump’s efforts to reduce legal immigration are redefining the types of immigrants the US will admit, thereby affecting the US’s demographic composition, creating a larger number of undocumented immigrants, imposing economic costs on the US, accelerating global talent competition and undermining global protection.

Analysis

Introduction

Donald J. Trump’s return to the White House in January 2025 has been accompanied by rapid and far-reaching attempts to overhaul the US immigration system. While immigration apprehensions, detentions and deportations dominate political debate, changes to the US legal immigration policy are transforming who can be admitted to the country. Through executive orders, administrative freezes and regulatory changes, Trump has implemented visa bans and suspensions, narrowed humanitarian protection, raised barriers for temporary workers and students, and reduced permanent immigration channels. His reforms are reshaping the composition of immigration to the US and producing significant US and international spillover effects.

Temporary and permanent visas

The US government issued nearly 11 million non-immigrant (temporary) visas in fiscal year (FY) 2024. Of this total, it issued 6.5 million B-1/B-2 visas for temporary visitors (business and pleasure), 2 million B1/B2/BCC visas for certain Mexican nationals who regularly cross the border, 425,000 F visas for students, and almost 1.2 million for foreign workers (along with immediate family members) across multiple categories, such as 315,000 for H-2A seasonal agriculture workers, 225,000 for H-1B high-skilled workers and 140,000 for H-2B seasonal non-agricultural workers.

In FY 2023 the government issued 1.1 million immigrant (permanent) visas, also known as green cards. Of this total, 64% were relatives of US citizens and 17% were based on employment sponsorship. The remaining were for humanitarian protection of refugees and asylees (9%), the Diversity Visa (DV) programme (6%) and other smaller categories (note that at the time of drafting, the US government has not finalised its FY 2024 report that provides comprehensive data on immigrant visas issued during the fiscal year.)

Obstacles

The Administration has implemented several sweeping actions to reduce access to temporary and permanent immigration.

Travel bans and entry restrictions

On 20 January 2025, Trump’s first day in office, he revived the so-called Muslim ban policy from his first term, issuing an Executive Order that directed his Administration to identify countries that should be subject to a full or partial visa ban.

Six months later, the Administration announced that it would suspend entry for nationals of 19 countries. Trump justified this action because of an alleged hate crime committed by an Egyptian national in Boulder, Colorado, though he did not add Egypt to the list of 19 countries. In December 2025 the Administration added 20 more countries to the list of suspended nationalities after an Afghan citizen was charged with shooting two US National Guard members in Washington DC. In both cases, Trump cited national security concerns about insufficient vetting and refusals to accept US deportees to justify his actions.

In January, the Administration announced a pause in issuing permanent visas to nationals of an additional 75 countries. This Administration claimed the pause was necessary because it is conducting a review of policies, regulations and guidance to ensure that admitted permanent immigrants do not use US welfare services or become a ‘public charge’, a term used for individuals who could become primarily dependent on public assistance to meet basic needs. In early February a coalition of US citizens, immigrants and non-profit organisations filed a lawsuit challenging the pause.

Taken together, nearly 60% of countries worldwide are now subject to a full or partial visa ban to the US due to these three actions. In addition, hundreds of thousands of individuals already in the US who are otherwise eligible to obtain or maintain lawful immigration status to obtain a green card or US citizenship are in a legal limbo.

Figure 2. Nationals of countries subject to full entry bans

Figure 3. Nationals of countries subject to partial travel restrictions

Figure 4. Nationals of countries subject to the immigrant visa pause

Public charge rule

In November 2025 the Administration issued a proposed rule granting US officers broad discretion to deny green cards to anyone they should deem likely to use public benefits in the future. It was built on a rule issued by Trump’s first Administration in 2019, but was later rescinded and replaced in 2022 by Biden. The rule is expected to be finalised in early 2026.

In the meantime, US consular officers working overseas received guidance in late 2025 that directed them to thoroughly vet applicants to ensure they would not rely on US public benefits if issued a visa. They are required to consider a visa applicant’s age and health, including obesity and mental health, in deciding if someone is likely to become a public charge. This makes it more difficult for foreign nationals with certain medical conditions, such as diabetes or obesity, or those who lack the economic resources, to obtain a visa.

Visa revocations

In January, the Administration boasted that it had revoked more than 100,000 visas since Trump took office last year, an increase of 150% from 2024. This includes 8,000 student visas and 2,500 specialised visas. Some of the leading causes for revocation were driving under the influence of alcohol, assault and theft.

Temporary visas

High-skilled worker visas

At the end of Trump’s first term, he imposed a temporary ban on the H-1B visa programme, which allows employers to petition for highly-educated professionals to work temporarily in certain occupations. A federal court later struck down the ban.

However, in November 2024, as President-elect for his second term, he defended the programme. He said, ‘It’s a great program’; and added, ‘I have many H-1B visas on my properties. I’ve been a believer in H-1B’. In June 2025 he backed the programme again, saying the country does not have enough people with ‘certain talents’ to fill certain jobs.

High-skilled visas have been a divisive issue in the Republican Party, creating rifts in Trump’s coalition. He has faced a backlash from some of his most influential supporters after he started publicly supporting the H-1B programme. Young conservatives have particularly become outspoken in their opposition.

The Administration announced a proposed final rule in September 2025 to update the H-1B lottery selection process, eliminating random selection and prioritising higher-skilled, higher-paid applicants. Most notably, the new process now includes a US$100,000 fee for new visa petitions on behalf of beneficiaries outside the US. Previously, it cost between US$2,000 and US$5,000 per petition, depending on the employer’s size.

The annual statutory cap is 65,000 visas, with 20,000 additional visas for professionals who graduate with a master’s degree or doctorate from a US educational institution. H-1B workers are often in fields such as mathematics, engineering, technology and medical science. Amazon was the biggest sponsor of H-1B workers for FY 2025, followed by Microsoft, Meta, Apple and Google. In FY 2024 over 70% of H-1B visa holders were Indian nationals.

The Administration has argued the reforms are critical to protect US workers and avoid suppressing wages by preventing companies from importing lower-wage labour. However, in response, large companies have begun expanding their local workforces, including in their Indian outsourcing hubs. Moreover, some organisations have argued that the fee constitutes a tax on talent and that start-ups and small businesses will be unable to afford it.

Lawsuits filed by 20 US State Attorneys General and the US Chamber of Commerce argue that the fee is illegal. A federal court ruled against the Chamber of Commerce lawsuit in December 2025, while the lawsuit by the Attorneys General remains pending.

The Administration finalised the rule in late December 2025 following the favourable court ruling, so the reforms are expected to take effect in time for the next visa lottery in March.

Student visas

In June 2024, as a candidate, Trump surprised many by saying, ‘You should get automatically, as part of your diploma, a green card to be able to stay in this country’.

Upon taking office, he has yet to implement this policy proposal. In fact, he has pursued policies that make it more difficult for international students to enter the country and has created additional administrative obstacles for those admitted.

In early April 2025 the government abruptly revoked the visas for 1,800 international students on F-1 student visas and J-1 exchange visitor visas, with little justification. Later that month, the government reversed the previous visa revocations.

One month later, all US embassies and consulates suspended interview scheduling for international students. When the pause was lifted in June 2025, it expanded social media screening requirements. Consular officers were instructed to search for potentially derogatory information, including political activism, alleged support for terrorism and perceived hostility towards the US.

In August 2025 the government published a proposed rule that would limit the time international students under the F-1 and J-1 visa programmes may remain in the US to four years. If students or scholars wish to extend their degree programmes beyond four years, they must apply for visa extensions. Compared with the current, more flexible process, this would be more burdensome and leave students in a legal limbo while they wait for their renewals.

New international student enrolment dropped by 17% in the Autumn 2025 semester, the largest single-year drop in over a decade (excluding the 2020 COVID-19 pandemic). US institutions cited several factors contributing to the decline, including visa issues, travel restrictions and an unwelcoming environment for international students.

US colleges and universities enrolled 1.2 million international students in 2025, or around 6% of total US enrolment. Indian and Chinese students accounted for more than half of all international students in 2025 (India 31% and China 23%).

Agricultural worker visas

In October 2025, the Administration introduced an interim final rule to streamline the filing process for H-2A temporary agricultural petitions. It established a ‘concierge’ team to provide a single point of contact for farmers navigating the visa petition process and waived in-person interviews for H-2A visa renewals. It also proposed significant reforms to reduce employers’ labour costs. The Administration expects these changes to reduce costs by more than US$2 billion annually by lowering wages for foreign farmworkers by more than 30%.

The Administration anticipates that its crackdown on the undocumented immigrant population in the US and stricter border enforcement measures, coupled with limited interest from US workers to perform farmwork, will lead to an agricultural labour shortage. From 2020 to 2022, 42% of crop farmworkers were undocumented.

The Administration seeks to help farmers hire foreign workers through the H-2A temporary agricultural worker programme while reducing their costs. The H-2A reforms are among the few instances in which the Trump Administration has not sought to reduce access to legal immigration. Its efforts also underscore how the Administration is taking steps to mitigate the expected impacts of its aggressive immigration enforcement posture. This is likely because farmers are important to Trump’s political base and because he seeks to avoid risks to the US food supply that could ultimately increase inflation.

A coalition of farmworkers and unions filed a lawsuit in November 2025 to block the rule from being implemented, arguing that it would depress wages for US and immigrant guest workers.

Permanent visas

 ‘Gold card’ investor visa

While some countries, such as Spain, are tightening or winding down ‘golden visa’ investor programmes aimed at attracting immigrants who invest in real estate, government funds or local businesses, Trump introduced his own initiative in 2025 to attract ultra-high-net-worth immigrants: the Gold Card Program.

Created in September 2025 via Executive Order, the Gold Card Program replaces or supplements the existing investor visa (EB-5) programme, though it requires substantially higher capital investment in exchange for permanent residence. It allows expedited US residency for US$1 million for individuals or US$2 million for corporations, plus an additional US$15,000 in processing fees.

As the programme was created by executive action, it operates outside the traditional statutory framework, which means it could be easily eliminated or revised by a future Administration. Moreover, only the US Congress has the legal authority to create new immigration visas, rendering the programme legally questionable.

Trump has framed the programme as a revenue-generating tool, though it would skew immigration towards wealth rather than skills or humanitarian need. The American Association of University Professors and a coalition of immigrants filed a lawsuit in early February to block the programme’s implementation, arguing that it prioritised ‘wealth over intellect or ability’ and bypassed Congress.

The DV programme

The DV programme offers up to 50,000 green cards to nationals of countries with low rates of immigration to the US. Since 1990 the programme has served as a key instrument to diversify US immigration flows. For instance, African nationals accounted for 42% of the green cards issued in FY 2024.

Trump tried to dismantle the DV programme in 2017, but a federal court blocked his action.

In December 2025 he directed the programme’s suspension after a Portuguese national, who entered the country via the DV programme, was charged with killing two university students and a professor. The Administration said it will conduct a comprehensive review of the programme’s screening and vetting procedures before resuming the issue of green cards.

Humanitarian programmes

Refugee admissions

Since establishing the US refugee resettlement programme in 1975, the government has admitted, on average, nearly 74,000 refugees per year. However, during the four years of the first Trump Administration, the government admitted an average of fewer than 30,000 annually, including fewer than 12,000 in Trump’s final year.

One of Trump’s earliest actions in his second term was the suspension of the US Refugee Admissions Program. Refugee resettlement was halted for nearly all nationalities. As a result, tens of thousands of refugees who had already been approved for travel were left stranded. The only exception was for Afrikaners (and other minorities) from South Africa. The Administration resettled 342 to the US from February through September 2025.

Moreover, for FY 2026 the Administration set the refugee admissions ceiling at 7,500, the lowest since the enactment of the Refugee Act of 1980. It plans to focus on Afrikaners from South Africa and ‘other victims of illegal or unjust discrimination in their respective homelands’. During the first three months of FY 2026 only 720 refugees have been resettled. Of this total, 99% are from South Africa.

In November 2025 the Administration also ordered a review of approximately 230,000 refugees admitted under the Biden Administration and a halt to green card processing for refugees who entered during this period. The process would include a comprehensive review and re-interview. If the government finds that the individual did not meet the US refugee standard at the time of admission, it will revoke his refugee status. Although refugees undergo lengthy and rigorous vetting before admission to the US, the Trump Administration claims that the previous Administration prioritised expediency, quantity and admissions over quality interviews and detailed screening and vetting.

Temporary Protected Status (TPS)

TPS allows nationals of designated countries to remain in and work in the US due to a conflict or disaster in their home country. The Administration has also moved to terminate or allow to expire 14 of the 17 TPS country designations, arguing that the ‘temporary’ nature of the relief had become a de facto form of permanent residency. The only remaining countries with TPS designations are El Salvador, Ukraine and Sudan, with expiration dates later in the year.

This policy change places over one million immigrants, including hundreds of thousands of long-term US residents, at risk of deportation. Litigation has slowed down the implementation of terminations in some cases, whereas in others the Administration has proceeded with them.

Figure 7. TPS-designated countries terminated by President Trump from January 2025 to January 2026

Temporary legal pathways

Trump has revoked the legal status of hundreds of thousands of immigrants who entered the US via alternative temporary legal pathways created by the Biden Administration (2021-25) to extend protections for particularly vulnerable populations, encourage legal migration and reduce irregular migration across the US-Mexico border. Trump argues that the previous Administration exceeded its executive authority and that the policies encouraged irregular migration.

An estimated 1.3 million immigrants were paroled into the US under Biden through various initiatives. Pursuant to existing law, the US may admit certain immigrants if they further a humanitarian cause or public benefit; however, the law does not give beneficiaries permanent legal status. Instead, those paroled are generally permitted to live and work in the US temporarily without fear of deportation.

After the withdrawal of US troops from Afghanistan in August 2021, the Biden Administration allowed Afghan evacuees to enter the US via humanitarian parole. Approximately 76,000 Afghans were admitted. The Administration then created the Uniting for Ukraine programme after Russia’s invasion in February 2022, admitting approximately 240,000 Ukrainians.

Following the success of these two initiatives, Biden established the Cuba, Haiti, Nicaragua and Venezuela (CHNV) humanitarian parole programme to encourage nationals from these four countries to pursue safe, legal and orderly migration and decrease irregular migrant arrivals at the US-Mexico border. Approximately 532,000 individuals entered the country through these programmes before Trump terminated them.

In April 2025 the government began notifying immigrants who had been paroled into the country after being processed at the border that their parole status had been terminated and that they should leave the country immediately. Nearly 937,000 asylum seekers and other immigrants scheduled appointments at official US border crossings from January 2023 to December 2024 via a US government app called CBP One. The Biden Administration granted parole to individuals who attended their appointments and passed security screenings.

Finally, Trump also ended the Family Reunification Parole (FRP) programme, which was designed to reunite certain US residents with family members from Colombia, Ecuador, El Salvador, Guatemala, Honduras, Haiti and Cuba. As of December 2024 nearly 59,000 nationals from these seven countries had received protection. In this case, the Trump Administration maintained that since the purpose of the FRP programme was family reunification, it did not meet the ‘urgent humanitarian’ standard required for parole.

Figure 8. Estimated number of individuals with Temporary Legal Status terminated by Trump in 2025

Impact

Trump’s first year back in office has delivered significant changes to the US legal immigration system. Although there have been no legal changes to date, Trump has used his executive authority to curtail legal immigration and determine what kinds of immigrants should be admitted.

He has discussed his desire to implement a permanent pause on immigration from so-called third-world countries and his preference for admitting immigrants from countries like Denmark, Norway and Sweden. Should Trump get his way, this would mean fewer and less diverse legal immigrants.

Academic research also anticipates a significant impact from Trump’s immigration policies on the US and its economy.

Trump’s policies will reduce legal immigration to the US by 33% to 50%, or by 1.5 million to 2.4 million legal immigrants, over his four-year term, according to a new study from the National Foundation for American Policy (NFAP). The estimated reductions are based on policies Trump has enacted to date, such as visa suspensions and bans, lower refugee admission levels and the implementation of public charge policies. Still, it does not account for the 2.7 million immigrants in the US with a temporary lawful status that has been terminated, such as individuals with TPS or those admitted under humanitarian parole.

Economic growth relies on labour force growth and productivity growth. Trump’s immigration policies would reduce the projected number of workers in the US by 6.8 million by 2028 and by 15.7 million by 2035. In turn, this would lower the annual rate of economic growth by almost one-third, according to another analysis by NFAP.

Trump’s immigration policies –aiming to combat irregular immigration and reduce legal immigration– likely resulted in net zero or negative immigration in 2025, according to a Brookings Institution study. It also concludes that reduced immigration will dampen labour force growth and consumer spending, contributing to a 0.2% drop in GDP in 2025 and a 0.1% drop in 2026.

Additional research published by the Center for Global Development shows that an average recent immigrant without a high school degree has a lifetime positive net fiscal balance of US$128,000. And when including expected children and grandchildren, the lifetime positive net budgetary effect is US$326,000. Immigrants with higher levels of education would have a more positive lifetime net fiscal balance.

Reduced legal immigration, particularly of high-skilled workers, is expected to hit US competitiveness and innovation. The US$100,000 fee on H-1B visas will make it very difficult for start-ups and small businesses to sponsor visas. It may also mean that large technology companies that rely on H-1B visas will locate these workers overseas rather than in the US.

Trump’s legal immigration policies are also expected to have international ripple effects. Over the next four years, the country’s attractiveness to international students, researchers and entrepreneurs will decline. At the same time, other countries, such as Australia, Canada and Germany, are actively recruiting high-skilled workers deterred by US restrictions, particularly in technology and artificial intelligence. In January, the German Chancellor Friedrich Merz noted that the number of highly qualified Indian professionals in Germany is growing rapidly.

The policies will also harm international protection. The large reduction in US refugee resettlement will leave thousands of individuals who were already vetted in dangerous, uncertain and precarious situations. It will also force refugees into long-term displacement and undermine family reunification.

The policies will also contribute to global humanitarian challenges. For example, reduced access to legal pathways, combined with US cuts to foreign aid and the aggressive deportation campaign, could exacerbate the humanitarian landscape in Central America, a region with high levels of emigration to the US and significant development challenges.

Lastly, the US retreat from its longstanding tradition of humanitarian leadership is likely to create a vacuum that no other country could fill in the near term.

Figure 9. Estimated legal immigration reductions during Trump’s second term, 2025-29

Congressional response and polling

Congressional response

Trump has faced limited public opposition from Congressional Republicans to his broad efforts to reduce legal immigration during his second term, with only a few instances of dissent.

In January 2025 one Republican in the House of Representatives called on Trump to protect Cubans, Haitians, Nicaraguans and Venezuelans who had been admitted in 2023 and 2024 under Biden’s humanitarian parole programme. In April and May 2025 this lawmaker introduced two bipartisan bills: one to designate TPS for certain Venezuelans in the country and one to allow certain Venezuelans in the US to obtain lawful permanent residence (green cards). She expressed concern with Trump’s decision to terminate the TPS designations for Venezuelans and urged him to refrain from deporting Venezuelans who had lost their TPS protections until conditions in the country improved.

Three Republicans in the House of Representatives joined Democrats in October 2025 to urge Trump to fix the high-skilled immigration system rather than impose a US$100,000 fee on H-1B visas. In a joint letter they called on the government to reverse the surcharge and instead pursue other reforms to address issues such as outsourcing, wage suppression and enforcement.

In December 2025 three Republican Senators expressed concern over Trump’s suspension of visa processing and restrictions targeting Afghan nationals. This policy reduced legal immigration pathways for individuals who had served with the US military in Afghanistan. The lawmakers advocated enhanced vetting rather than a blanket suspension of legal immigration processing.

Democratic members of Congress, on the other hand, have nearly uniformly opposed Trump’s legal immigration reforms. However, since Trump has pursued these changes through executive actions rather than through legislation, there have been limited opportunities to slow down or block them. Moreover, because Democrats are in the minority in both the House of Representatives and the Senate, and Republicans have largely backed Trump’s reforms, they have been unable to thwart them.

Polling

Trump entered office in 2025 with solid backing for his immigration agenda to secure the US-Mexico border and implement an aggressive deportation campaign. However, one year into his second term, polling indicates that the tide is turning.

US citizens are divided as to whether the country should increase or decrease the number of legal immigrants admitted, but fewer now support reducing legal immigration, according to a YouGov polling conducted from 30 January to 2 February. Compared with polling in January 2025, 10 percentage points fewer US citizens now favour reducing legal immigration. They are also more likely to say that immigration makes the country better off, a 15% jump since January 2025. Moreover, 50% believe Trump’s approach to immigration is too harsh, while 36% say it is about right and 8% think it is too soft.

Separate polling conducted by Ipsos from 23 January to 25 January reveals that support for Trump’s handling of immigration is declining. More US citizens now disapprove (53%) than approve (39%). By comparison, in May 2025, 47% approved and 45% disapproved, a 6% decline over the past eight months.

Conclusions

Trump’s second-term immigration agenda is a sweeping attempt to reduce legal immigration and reshape the composition of who is admitted to the country. However, rather than pursuing legislative reforms, he has relied heavily on executive authority to narrow access to the US immigration system. This means that a future Administration could easily reverse these changes, just as he annulled much of Biden’s immigration policy reforms.

Domestically, these policies are expected to carry significant consequences. Reduced immigration is weighing on labour-force growth, innovation and higher education, while introducing uncertainty for employers, universities and immigrant communities. The suspension of refugee admissions, the pause in the DV programme and the termination of many temporary legal pathway programmes reflect a broader shift away from more diverse and humanitarian immigration flows, thereby reshaping who can enter and remain in the US. Moreover, the strategy of terminating the legal pathway programmes created by the former Administration and ramping up efforts to revoke visas eliminates the legal status for a large group of immigrants, rendering them undocumented and subject to deportation.

Internationally, the repercussions are already visible. As the US becomes a less predictable and desirable destination for students, researchers and skilled professionals, other countries –including some EU member states– are moving to capture displaced talent. At the same time, the contraction of refugee admissions and legal pathways will weaken global protection amid a rising displacement and instability, and damage US credibility as the global humanitarian leader.

La entrada Trump 2.0’s year one: reshaping US legal immigration se publicó primero en Elcano Royal Institute.

• The EU’s Artificial Intelligence Act (AI Act) is one of the first binding AI regulations worldwide. EU policy makers intended it to serve as a blueprint for global AI governance, relying on the so-called Brussels Effect.
• In a fast-moving and transformative domain such as AI, regulatory quality is a prerequisite for influence as a model. In this case, quality includes providing adequate coverage of the most critical risks associated with AI usage, deployment and adoption.
• Amongst those risks is malicious use, which arises from the intentional use of AI capabilities to cause harm. This analysis stress-tests the AI Act’s provisions against malicious use risks.
• The results reveal that the AI Act’s coverage of malicious use risks is uneven: while some risks are addressed head on, others are addressed only indirectly through other EU or national regulations, or through international initiatives. By leaving significant gaps, the AI Act undermines its own value as a global model.
• The reliance on domestic and sectoral regulation to address these gaps, while coherent from an internal perspective in that it helps avoid overlaps and overregulation, assumes that comparable principles are widely shared or will be replicated internationally, an assumption that may not hold.
• Thus, EU policymakers should use the AI Act’s periodic revisions to strengthen and complete its regulatory coverage. By contrast, recent initiatives such as the Digital Omnibus signal a narrowing of scope, risking reputational damage. In parallel, the EU should engage internationally with a renewed narrative that acknowledges the AI Act’s limited exportability in its current form.

Analysis

AI safety efforts in the face of competitive pressures

In today’s geopolitical landscape, the race for artificial intelligence (AI) dominance among states and corporations focuses on technological leadership and capabilities, not on safety and risk management. This is demonstrated by the policies, investments and scientific breakthroughs of the key geopolitical players.

The US released America’s AI Action Plan in summer 2025, aiming to position American AI as the global standard and to ensure that allies rely on US technology. This ambition is pursued through a largely hands-off regulatory approach, that has included revoking Joe Biden’s Executive Order on safe and responsible AI and efforts to block state-level AI regulation. This strategy has benefited the US private sector, which hosts many of the world’s leading AI firms and led global private AI investment in 2024 with nearly US$110 billion, more than five times Europe’s total.

China is likewise pursuing global AI leadership by 2030, targeting advances in AI theories, technologies and applications. It is doing so through coordinated industrial policy across the AI value chain, including energy, talent, data, algorithms, hardware and applications, with AI positioned as a tool to address economic, social and security challenges. Goldman Sachs estimates that Chinese AI providers will invest US$70 billion in data centres in 2026, alongside extensive state support for domestic semiconductor capacity and pooled computing infrastructure.

The EU has also acknowledged this competitive landscape. In April 2025 it launched the AI Continent Action Plan, aiming to mobilise computing infrastructure, data, talent, algorithms and regulation. The EU has announced 19 AI Factories, 13 AI Factory Antennas and, in cooperation with the European Investment Bank, five AI Gigafactories. Further initiatives on AI are expected to be discussed or passed in early 2026, with the proposed Cloud and AI Development Act aiming to stimulate EU cloud capacity, and the Digital Omnibus simplifying –and reducing– some of the elements of the EU AI Act as part of the EU’s recent deregulation drive.

These developments have captured the attention of the public and policymakers worldwide in recent months. They reflect an environment of fierce competition and rapid advancement of AI. Such a setting often overshadows, and even casts aside, efforts and concerns over AI safety and risk management. This is perfectly exemplified by the little attention that many safety-oriented initiatives have received, despite happening almost in parallel to the above-mentioned AI-promotion efforts. In the EU, international AI safety engagement is spearheaded by the AI Office, and includes the International Network of AI Safety Institutes, and the work on AI safety, mutual recognition and standards within the Digital Partnerships of the EU with Canada, the Republic of Korea or Singapore, or the Trade and Technology Council with India.

The dynamics of extreme competitive pressure give AI regulatory frameworks a more critical role than ever in embedding guardrails that can prevent the materialisation of catastrophic risks associated with AI capabilities and speedy deployment. While decision-makers are turning their attention towards rivalry and, particularly in the EU’s case, competitiveness, the AI academic and civil society community remains focused on trust, safety and risks.

In this context, the EU’s Artificial Intelligence Act (AI Act) stands out as one of the first binding AI regulations worldwide. While other governments and international bodies have issued documents on AI safety, these remain broad, non-binding principles with weak mechanisms for enforcement or monitoring. By contrast, the AI Act is highly specific: it regulates concrete use cases according to their anticipated risk, rather than targeting the technology itself.

Beyond its legal innovation, the AI Act carries global significance. EU policymakers intended it to serve as a blueprint for AI governance. They assumed that the EU’s regulatory first-mover advantage and market size –the so-called Brussels Effect– would serve as strong-enough pull factors for other jurisdictions to base their AI regulations on the EU AI Act. Even though influence was not the primary motivator, it was indeed part of the push to approve the legislation, with the Council of the EU hailing the AI Act as possibly setting ‘a global standard for AI regulation’.

Reactions from the international community to the AI Act have been mixed. In the US, opinion polls suggest public support for the EU AI Act and similar legislation in the US itself, a stance that contrasts sharply with that of the Trump Administration. By contrast, China has developed its own AI safety framework, has expressed support for ‘comprehensive legal and ethical frameworks’ and has put forward proposals for global AI governance. At the same time, other major digital actors in the Global South are shaping their positions on the AI Act and on AI governance more broadly. India, with a strong digital and AI ecosystem, looks at the AI Act as a source of inspiration, particularly with regard to its risk-based approach, human oversight requirements, data protection standards and the streamlining of AI governance through a centralised authority. This perspective is not universally shared in the Global South. In South Africa, for example, some civil society organisations have expressed concern about uncritically following European approaches to digital regulation.

Yet for the AI Act to succeed as a model of AI risk management, regulatory quality is a precondition. In the context of AI, regulatory quality entails the capacity to adequately address, over time, the most critical risks posed by AI systems, that is, those associated with the most severe potential harms and highest negative impact. In other words, this analysis argues that, for foreign policymakers sensitive to AI safety considerations to view the AI Act as a reference model, the relevant risks should be addressed and acknowledged in the regulation. Otherwise, the AI Act will not achieve any global influence and will be superseded by alternative frameworks that better address known AI risks.

Given this context, this analysis focuses on risks arising from the malicious use of AI: intentional practices that use AI to cause harm. These risks are a subset of the most severe and foreseeable pathways to what the AI safety community labels ‘catastrophic’ outcomes, from large-scale disinformation and fraud to cyber offence and bioweapons development. The rationale that guides this analysis is that, if the EU AI Act is to fulfil its aspiration of becoming a global blueprint for AI risk management, it must adequately account for malicious use risks. Where it fails to do so in its current form, regulatory adjustment will be essential.

Therefore, this analysis is structured in four parts: first, it lays out the framework of malicious use that will be used throughout the paper; secondly, it assesses whether the AI Act recognises malicious use sub-risks in its provisions and if gaps remain; thirdly, it explores the reasons behind the AI Act’s design and limitations; and, finally, the paper concludes by linking the problems posed by the findings to the AI Act’s intended Brussels Effect.

Discrepancies in AI risk frameworks: the AI Act versus malicious use risks

The AI Act imposes obligations (mainly) on the providers and deployers of AI systems based on the intensity of the risks of their potential use cases. According to the legal text, AI systems are conceptualised as falling into the following risk categories: those whose use poses unacceptable risks and are thus prohibited; those with high-risk use cases, which face transparency, cybersecurity and risk management obligations; and use cases whose risk arises from the lack of transparency of AI systems and their deployment. This approach, however, varies for general-purpose AI (GPAI) models, which are singled out as a specific type of AI technology with distinct obligations. In their case, the text imposes more extensive transparency obligations to providers of GPAI models, such as information to downstream developers of AI systems and the disclosure of data used for training. The requirements are even wider in the case of GPAI models with systemic risks, with stronger risk management and cybersecurity obligations.

Nevertheless, the AI Act’s risk conceptualisation is only one of the many developed and applied by industry, governments, international organisations, academia and civil society. While the AI Act’s ‘risk-intensity’ focus may be suitable for swift policymaking and enforcement, it is less adequate for evaluating the coverage of AI’s most critical risks. In such a context and given the extraordinary opportunities that AI offers malicious actors to cause harm, this analysis turns to malicious use risks. These are intentional practices that employ AI capabilities to compromise the security of individuals, groups or society. The defining element is the ‘intent to cause harm’, which differentiates malicious use from accidental misuse or other unintended consequences of AI. Malicious use is also distinct from what may be termed as malicious abuse, which exploits the vulnerabilities within AI systems themselves rather than weaponising the systems’ capabilities.

Malicious use risks can be further subdivided into sub-risks. In the spirit of comprehensiveness, this analysis examines the AI Act’s coverage of nine identified sub-risks. The categorisation aims to be exhaustive and is based on the malicious use risks cited and highlighted by international AI safety organisations, policy reports, academia and reported incidents. The resulting nine sub-risks are:

• Bioweapons and chemical threats: the use of AI to design novel pathogens or toxins (bioterrorism), to conduct a biological attack or to provide instructions for reproducing existing biological and chemical weapons. It includes dual-use risks where AI drug discovery or medical AIs can be repurposed for malicious ends.
• Intentional rogue AIs: the creation and unleashing of autonomous systems with destructive goals (eg, ChaosGPT). These systems may be deployed and/or pursue harmful objectives, potentially adapting without human oversight.
• Disinformation and persuasive AIs: AI used to generate false or misleading content at scale or for personalised persuasion (including personalised disinformation) by exploiting cognitive vulnerabilities. These uses undermine public trust and democracy and may include covert foreign influence operations.
• Fake and abusive content: generative AI used to create content that harms individuals. This includes non-consensual intimate imagery (NCII), AI-generated child sexual-abuse materials (CSAM), voice impersonation fraud, blackmail, extortion, reputational damage and psychological abuse.
• Fraud, scams and social engineering: AI systems (eg WormGPT or FraudGPT) used to produce convincing phishing, impersonations and scam chatbots that enhance the effective deception of victims.
• Cyber offence: AI used to support and automate malware generation, vulnerability discovery and multilingual phishing, creating offence-defence asymmetries and lowering entry barriers for attackers.
• Autonomous weapons and military use: the deployment of AI-enabled drones and weapon systems that can target and attack without human oversight, raising risks of escalation.
• Concentration of power: governments or corporations may misuse AI to entrench authority, suppress dissent and monopolise AI capabilities.
• State surveillance and oppression: AI enables governmental mass surveillance, predictive policing, censorship and the repression of minorities.

As argued, comprehensive coverage of malicious use risks is required for any regulation to exert global regulatory influence. Thus, the AI Act’s provisions will be stress-tested against this framework of malicious use risks.

The AI Act’s coverage of malicious use risks is unequal

As Figure 1 shows, the AI Act’s coverage of malicious use sub-risks is highly uneven. Four sub-risks are almost unregulated, four are only partially or indirectly addressed and just one is subject to extensive prohibitions and safeguards. This unevenness not only weakens the AI Act’s internal coherence but also undermines its potential as a global regulatory model.

No direct coverage or incidental overlap

Four sub-risks receive no direct coverage: bioweapons and chemical threats; intentional rogue AIs; autonomous weapons; and the concentration of power. They are only incidentally covered through general GPAI systemic risk provisions or remain entirely outside the Act’s scope.

For bioweapons and chemical threats, only generic provisions on risk management and incident reporting for GPAI models with systemic risks apply. International conventions prohibiting biological and chemical weapons remain the main safeguard.

Intentional rogue AIs face a similar regulatory vacuum. Even though GPAI models, especially open-source models, can be used to develop autonomous AI agents with harmful objectives, mitigation is limited to risk management and incident reporting of GPAI models with systemic risks, with an additional layer of protection stemming from the obligations of human oversight on high-risk AI systems. These could limit the autonomous nature of intentional rogue AIs and consequently, their risk.

Meanwhile, autonomous weapons and military use are explicitly excluded from the AI Act’s scope because defence and national security policy are Member State competences. Only dual use AI systems (those with military and civilian use cases) fall under the AI Act, leaving significant gaps in one of the most catastrophic risk areas.

Finally, major sources of concentration of power risks are largely neglected: while the use of AI for state power is limited via restrictions on predictive policing, corporate concentration of power is entirely unattended. This is particularly relevant in a context where the Digital Markets Act (DMA) does not address some of the concentration dynamics of AI technologies. These include the massive data advantages held by very large digital companies or the infrastructure advantage of cloud providers, which concentrate vast amounts of computing power, both critical for the development and use of large AI models.

Partial or indirect coverage

Four other malicious use sub-risks are only partially addressed: disinformation and persuasive AIs, fake and abusive content, fraud, scams and social engineering, and cyber offence. In all cases, obligations exist (transparency, limited prohibitions and cybersecurity obligations) but they fail to address all aspects and sources of the risk. Often, complementary legislation is needed and relied on to round up risk coverage.

For disinformation and persuasive AIs, the AI Act prohibits manipulative and deceiving techniques to distort behaviour, and requires the disclosure of deepfake, synthetic content and human-to-machine interactions. Despite such obligations it does not prevent personalised persuasion, for example, via AI chatbots, leaving an important gap partially filled by the Digital Services Act (DSA).

Fake and abusive content is touched upon indirectly through prohibitions on exploiting people’s vulnerabilities to impact their behaviour (eg, the use of AI systems for blackmail and extortion). However, key and serious forms of fake and abusive content, such as non-consensual intimate imagery (NCII), AI-generated child sexual-abuse materials (CSAM) –whose targets are mostly women and children, respectively– are absent. In both cases, labelling obligations for deepfakes and synthetic content provide only weak risk and victim protection, especially taking into account that there are easy technical methods available to circumvent such labelling.

For fraud, scams and social engineering risks are not explicitly regulated either. Transparency and disclosure requirements may reduce the effectiveness of impersonation or phishing, but do not prevent these practices outright.

Similarly, cyber offence is addressed mainly through previous EU legislation criminalizing cyberattacks, regardless of the means. The AI Act’s provisions focus more on malicious ‘abuse’ –such as protecting high-risk systems against adversarial attacks– rather than malicious use, meaning that AI-enabled cyberattacks are left largely outside its scope.

Relatively extensive coverage

By contrast, only one sub-risk –state surveillance and oppression– is extensively covered. The AI Act bans social scoring, predictive policing, certain types of biometric identification and biometric categorisation, among other practices. This reflects the political salience of the issue in EU debates, which might be due to the novelty of this risk relative to others, as well as the precedent of authoritarian regimes using the technology, notably China. Advancements and wide availability of connectivity, CCTV, data and better-performing AI models have turned this risk into a key concern for policymakers and society at large.

In sum, the AI Act provides an imbalanced risk coverage of malicious use risks. As will be discussed in the following section, this might make sense from an intra-European perspective; nevertheless, it has negative implications on its potential to become a global regulatory model.

The AI Act’s coverage of malicious use risks is limited by design

The reason for the AI Act’s imbalanced risk coverage lies in its design and it is partly intentional. It has to do with avoiding redundancy in regulation, since the AI Act was conceived within a larger corpus of legal acts. The AI Act aims to address AI-related risks that are not covered in previous legislation. For example, the development and use of bioweapons, and the conduct of scams and cyberattacks was already criminalised before the emergence of AI. Thus, since AI-enabled crimes should not be treated differently from their traditional counterparts, and protections should not be redundant and excessively onerous with respect to existing legislation, there was no point in covering them extensively in the AI Act.

The consequence is that, as mentioned in the previous section and showcased in the last column of Figure 1, many of the malicious use sub-risks are complemented by other EU laws. For instance, persuasive AIs are partly covered by the DSA; some types of fake and abusive content by the Non-Consensual Intimate Image directive; cyber offence protections by the Cyber Resilience Act; and corporate power by the DMA. This makes absolute sense from a domestic perspective to prevent overregulation and simplify compliance. Therefore, what regulators strived to do was address a singular aspect of AI, which is that the technology augments the accessibility and impact of engaging in malicious use activities. Consequently, legislators sought to embed safeguards that increase friction and diminish the incentives to take on illegal activities via AI.

Besides the conscious design choice making the AI Act patchy, there are additional limitations to its scope. These can be seen not in its coverage of each specific sub-risk, but cross cutting the nature of malicious use risks. The limitations lie in the treatment of personal use and the definition of ‘reasonably foreseeable misuse’. The AI Act places personal use of AI in a grey zone, since personal, non-professional uses of AI systems are not covered. The text relies on the obligations of developers and providers to then limit the risk of malicious use downstream. Therefore, malicious individuals fall through the gaps unless caught later by criminal law. Once again, this choice is understandable through the lens of not duplicating (re-criminalising) activities that are already conceived as illegal by EU and Member State law; furthermore, because monitoring compliance with the AI Act on the personal use of individuals would simply be impossible without a large-scale effort of surveillance. However, the trade-off leaves an important and especially problematic gap in malicious use coverage because AI amplifies both the incentives and the ease of malicious activity, making the prospect of criminal prosecution a weak deterrent.

Additionally, the AI Act establishes risk management obligations based on the intended use and the ‘reasonably foreseeable misuse’ of AI systems both for high-risk AI systems and GPAI models with systemic risk. The issue is that ‘reasonably foreseeable’ misuse may have many different meanings and interpretations, weakening enforcement consistency and regulatory certainty. Some companies will certainly hold on to such vagueness, as OpenAI has demonstrated in court by arguing that the use of ChatGPT for self-harm is not its responsibility, as it is part of personal ‘misuse, unauthorised use, unintended use, unforeseeable use and/or improper use’ of its product.

Yet from an influence and regulatory expansion perspective, these design choices and limitations are a problem: by leaving many malicious use risks outside the scope of the AI Act, its value as a model decreases. The assumption from EU regulators might have been that the left-out obligations and principles are shared by other countries and their domestic laws; or it might have been that the regulatory influence of those domestic laws will also spread as a result. However, third countries will most likely not want to import the EU’s entire regulatory ecosystem. While these choices are appropriate for the protection of EU users and companies, they run counter to promoting influence.

Lastly, it is important to note that, in some cases, the safeguards proposed by the AI Act are very weak with regards to the threat. The case of personalised persuasion is telling since it sits awkwardly in between the AI Act and the DSA without being properly regulated. For instance, persuasive chatbots require labelling under the AI Act, signalling the nature of human-to-machine interactions. Nevertheless, cases of suicide and even murder in the last few months have demonstrated that the persuasive potential of AI is not effectively mitigated by explicitly labelling AI chatbots as artificial, nor by communicating users the terms of use of AI tools.

All in all, the outlined limitations create enforcement gaps that may allow malicious use to flourish at the margins of the Act, undermining both its protective function within the EU and its credibility as a global regulatory model.

Conclusions

The EU AI Act has received ample attention in the last few years. Its novelty as the first comprehensive regulatory attempt regarding AI and the assumed incentives to comply made policy makers confident that the EU’s approach would become the global norm.

Much of the debate on the AI Act after its adoption and entry into force has focused on the topics of overregulation, innovation or implementation hurdles. However, little attention has been paid to the adequacy of the Act’s risk coverage and its ability to protect society from malicious uses of AI. This paper has sought to fill that gap.

The analysis reveals that coverage of malicious use risks is unequal. While state surveillance and oppression risks are extensively accounted for, other critical risks –such as bioweapons, rogue AIs or the corporate concentration of power– remain largely unaddressed. In some cases, such as for autonomous weapons, the international community is trying to bridge the gap; in others, the expectation is for other sectoral and horizontal regulations to mitigate malicious use.

Such an imbalance in malicious use risk coverage has a negative impact on the AI Act’s global influence. Its reliance on other domestic and EU regulations, the prevention of ‘reasonably foreseeable misuse’ and the exclusion of personal, non-professional uses of AI systems pose further challenges to the Brussels Effect in AI. These design choices weaken the AI Act’s prospects as a regulatory model by limiting its exportability. The problem stems from disregarding AI’s transformation of the cost-benefit analysis of malicious use: it lowers barriers to access, amplifies incentives and reduces deterrents. Therefore, reliance on domestic and sectoral laws, the exclusion of personal use and ambiguity of interpretation leave ample space for malicious users to inflict harm.

The insights derived from this analysis offer EU policymakers seeking a global imitation of the AI Act three complementary policy options. The first is the re-examination of the AI Act through the lens of other risk conceptualisations. This analysis has provided only one example of how adjusting the framework allows the identification of gaps and loopholes. Putting the text under the scrutiny of other risks (eg, proxy gaming of unintentional rogue AIs or AI selfish behaviour under corporate AI race dynamics) could enrich our understanding of AI risk coverage and provide policymakers with options for the AI Act’s improvement.

The second policy option is the amendment of the AI Act in the foreseen, periodic revisions envisaged in Article 112 in light of the findings. In particular, the list of high-risk AI systems in Annex III could be modified through Delegated Acts, which require less time, resources and politically consuming processes. The goal would be to cover unattended gaps, such as protection against persuasive AIs.

Lastly, the third policy option has to do with international dialogue. EU policymakers must honestly acknowledge to partners that the AI Act cannot be exported in its current form. Therefore, the EU’s AI international engagement and discourse should refrain from portraying the AI Act as a plug-and-play global blueprint, but the foundation for a conversation. Its risk-based approach is compelling, but it is subject to risk-perceptions and risk tolerance, which may differ across cultures and societies. It is an incomplete framework that relies on prior legislation, which in turn builds on subjective understandings of power concentration and freedom of speech, among others. Still, the EU can turn this into an opportunity for self-improvement. The AI field is constantly evolving. Hence, the EU must adopt an open, learning approach in its dialogue with international actors, use its own AI regulation as the initial basis for discussions and identify space for improvement based on other approaches.

As mentioned above, this analysis aims to provide a complementary perspective to the debate around the AI Act and the Brussels Effect, although from an angle that has not garnered extensive attention. Assessing whether the regulation can serve as a model for AI risk management, particularly in addressing catastrophic risks that societies worldwide seek to mitigate, offers a specific way to evaluate the AI Act’s attractiveness. This approach has its own caveats and limitations, which need to be openly acknowledged, the most important being that third countries will look at other cues of success that are not under the scope of this article. Out of those cues, two stand out.

The first is whether the model actually works in the prevention of risks. For that, the model needs to be tested, which can only happen once all the AI Act’s provisions come into force. Therefore, only time will tell.

But there already are some discouraging signs in this respect. The Digital Omnibus proposed by the European Commission in November 2025 includes a series of measures that, on the one hand, delay the implementation of safeguards against malicious use risks and, on the other, reduce coverage. For example, the Omnibus delays the entry into force of some obligations applicable to high-risk AI systems for up to a year or a year and a half and introduces a transitory period for GPAI watermarking. In terms of reduced coverage, it exempts providers of high-risk AI systems conducting narrow tasks from registering in the EU high-risk database and allows for a broadening of the type of data used in model development and training, potentially increasing the incidence and effectiveness of disinformation and persuasive AI systems, fake and abusive content or social engineering uses.

These changes were introduced a little under two years after the European Commission, the Council and the Parliament reached an agreement in trilogues and have created great legal uncertainty amongst enterprises and rage amongst human and digital rights organisations. The amendments need to be negotiated and approved by the Council and Parliament before August 2026, when obligations would apply under the current legal framework. Nevertheless, neither of the co-legislators has shown signs of haste while the industry does not know for which obligations they should prepare. This situation delays the AI Act’s litmus test as a model and undermines the perception of its effectiveness.

Another aspect of success for foreign policymakers is whether the AI Act favours or hinders the development of an AI industry in Europe. Unfortunately, the timing for an objective evaluation in this respect is very inconvenient. The Draghi report unleashed an unintended wave of critique in the European political discourse to the impacts of European regulation on the innovation capacity and competitiveness of EU industries. The above-mentioned Omnibus is testament to the simplification frenzy. Therefore, assessments of the AI Act’s impact over AI innovation and development in the EU are bound to be biased by the current political climate. In any case, this analysis does not evaluate whether the AI Act will promote or prevent a vibrant AI ecosystem in Europe, even though third countries will surely pay attention to such factors when considering regulatory imitation.

In sum, the AI Act is an important step for AI governance, but its reach and global influence will be constrained not only by implementation hurdles but also by its design. EU policymakers, providers and the AI risk community should recognise important limitations in risk coverage. Malicious use risks are only one dimension of the broader set of catastrophic risks posed by AI. Europeans must not let their guard down and pretend that replicating the AI Act abroad will suffice to avert all damage. Should this occur, Europe’s international efforts for AI governance will be misplaced.

[1] The author thanks Judith Arnal, Darío García de Viedma, Amin Hass, Raquel Jorge and Miguel Otero-Iglesias for their comments on this analysis, which have enrichened and improved the text.

La entrada Risk without borders: the malicious use of AI and the EU AI Act’s global reach se publicó primero en Elcano Royal Institute.

• The transatlantic relationship is facing a monumental challenge. The ‘America First’ slogan of the second Trump Administration is now translating into a policy that is reversing the traditional habit of promoting unity among NATO allies. Washington is replacing this with a strategy that not only challenges the accepted wisdom of partnership but puts the very basis of the Alliance at risk by abrogating an attachment to international norms and reducing the respect for old friends. Such a political posture has generated a feeling of betrayal even among Europe’s staunchest US allies.
• However, it would be unwise to declare the end of the NATO project prematurely, particularly bearing in mind the unique value of the US contribution to European security at the time of a revival of the threat of Russian military aggression. The countries on the eastern flank have a special stake in this. Formally, NATO arrangements are still in place, and its operational potential remains strong and has not been exhausted. There are also political dynamics in the US that could potentially reverse Washington’s current confrontation policy towards its European allies.
• Faced with the new reality, Europeans should adopt a dual policy: one which still tries hard to preserve NATO as long as possible, while in parallel developing their own strength and identity in the realm of defence. Five essential elements can be suggested that would nurture Europe’s urgently needed ‘growing-up process’ as a serious defence player, able to provide security even without an assumed support of Washington. These are: (a) a closer overlap of national threat assessments; (b) an acceptance of imperfection; (3) an ability to exercise collective self-discipline; (d) a greater belief in its own potential; and (e) an embrace of a bolder policy, accepting new ways and novel approaches.

Analysis

Transatlantic grief

At the end of 2025, Ambassador Ivo Daalder, an astute analyst and practitioner of transatlantic security arrangements, served –from the other side of the Atlantic– a bitter diagnosis. He wrote that Europeans are in the fifth, and final, phase of grief over the loss of the transatlantic relationship. The phase is acceptance and follows denial, anger, bargaining and depression.[1]

Daalder’s diagnosis can be taken as a cue for some further observations. Specifically, there are a similar number of recommendations that may help to provide an answer to his key question: will Europe prove genuinely ready to pursue its own interests in the face of a new reality, with the US is neither communicating nor behaving as a real ally?

Before doing so it might be appropriate to offer an important qualifier to the stark diagnosis described above. Yes, it is no longer possible, or desirable, to deny the fact that a tectonic shift is taking place in the transatlantic community of democratic, like-minded allies. The publication of the US National Security Strategy (NSS), a public policy-setting document defining priorities for the whole apparatus of the US government, has confirmed this emphatically.[2]

After a year in office the Trump Administration no longer perceives Europe as its preferred ally and partner. It considers Europeans weak and inferior in strength to other strategic players on the international arena. Moreover, the US is displaying a new propensity to part ways with its long-standing allies on many key issues. Threatening to take over Greenland against the express wishes of a respected ally is an unprecedented step by any standards. Implementing such a policy by force could potentially destroy NATO as we know it.[3] The US voting pattern in the UN has moved closer to one associated with Russia and other authoritarian states. On many occasions Trump has shown a higher degree of sympathy towards Putin’s views than those of Europe.

Ominously, Washington has started communicating, in a frequently brusque manner, that it expects Europeans to speed up the process of taking primary responsibility for security on their continent, perhaps as early as 2027.[4] The US has drastically changed its policy on Ukraine, particularly by curtailing the financial assistance offered by previous Administrations. Moreover, while allowing its partners to buy for Kyiv essential military systems made in US, this Administration has at times adopted a dubious position as mediator between the aggressor, Russia, and the victim, Ukraine. It has even hinted at an option of acting in an equally equidistant manner on matters of European security. In general, Trump and his representatives have started treating European institutions as a bigger threat than Russia or China. In actual fact, they have initiated a process of undermining them. Trade relations with Europe have followed a similar trajectory.

These are sufficiently worrying developments to alarm committed Euro-Atlanticists or even turn them into ‘transatlantic orphans’. Such a feeling of US betrayal –of ideals and values– as well as doubts about the veracity of security commitments, is felt particularly acutely by the nations at the eastern end of the continent.[5] Having emerged successfully from decades of Soviet subjugation (with US encouragement and assistance) they have the most to fear from the newly emboldened form of Russian imperialism.

Too early to bury NATO

But what is not warranted is a temptation to submit to an extreme form of pessimism, to an ‘all is lost’ syndrome. It would be very unwise to conduct NATO’s funeral today and give up hope for a future reappraisal of US policy towards Europe. Most importantly, the US has not yet revoked its collective defence commitment enshrined in the Washington Treaty. US forces are still stationed in Europe, as are its command elements and stored equipment. No formal US document says that Washington intends to leave NATO.

Moreover, there is nothing close to a consensus among allies as to accelerating a potential US disengagement from NATO. Frontier states will surely do everything in their power to keep the essential US security guarantees in place. What else could be expected from them when the majority view within the Alliance now predicts a genuine threat of a possible Russian attempt to test the defences of the eastern flank to emerge as early as 2030?[6] Only a foolish leader would want to unilaterally reject the unique US defence pledge backed by the latter’s defence capabilities (both nuclear and conventional) and declare them no longer valid. It would be highly risky from the point of view of deterrence. The exceptional value (extremely difficult to replace at short notice) of US military capabilities is recognised fully by the Western European capitals as well. The clearest proof of this recognition was recently seen in an almost undignified manner, with the countries forming the Coalition of the Willing for Ukraine pleading with Washington to provide backing for the non-US-led reassurance force (vide the Paris Declaration).[7]

NATO itself still has a lot of political and military potential that has not been fully used (or sufficiently acknowledged) to dilute the risk of a full US security withdrawal from Europe. Washington’s demand that Europeans take a much greater responsibility for the conventional defence of the continent is being answered under the agreed NATO defence planning schedule. In percentage terms, for this purpose the European members of the Alliance are already committing more than two thirds of the necessary NATO forces and capabilities under existing plans. The operational burden-shifting process is gathering speed. Also, on specific and current issues of contention, NATO can offer a valid contribution. For example, there is leeway to significantly increase a military input of non-NATO allies for the protection of Greenland and of the entire strategically crucial GIUK (Greenland, Iceland and UK) Atlantic route.

More generally, the military, political and economic assets of US allies can help it in its global confrontation with strategic rivals such as China. They can only be ignored by Washington at an irrationally excessive cost to US interests. A quick glance at GDP and technological comparisons strongly suggests that a dogmatic belief in the ability of the US to beat China in a competition by itself would not stand up to reality.[8]

Access to allied territory in Europe (the same applies to Canada, Iceland and Turkey) provides huge operational benefits to US military planners in terms of military bases, harbours, infrastructure such as hospitals, prepositioned equipment etc. As a case in point, the recent operation conducted by US forces in the Atlantic that resulted in the seizure of tankers suspected of smuggling Venezuelan oil would have been almost impossible to perform without the assistance of the UK. And the low hanging fruit of soft power that entices allies to help the US voluntarily could still be available for the latter to harvest if only this Administration were to appreciate its importance.

Finally, the biggest mistake in giving in to the temptation of embracing the inevitability of transatlantic divorce would be to equate US with the Trump Administration. What seems unstoppable today may still prove reversible in the months ahead. There is no convincing proof that the current course of US policy –inexplicably antagonistic towards Europeans (and Indo-Pacific partners, for that matter)– has solid foundations in US public sentiment. It does not. In fact, in 2025 the net favourable opinion of NATO increased across the entire political spectrum in the US. Up to 75% of those polled support Article 5.[9] The average US citizen judges Putin and other autocrats harshly. In this context, one should not lose hope that the arguments used by the White House claiming that ‘acquiring Greenland as a US national security priority [is] necessary to deter our adversaries in the Arctic region’ potentially by military force against an erstwhile ally, would be regarded by the electorate as unacceptable or at least irrational. Surely most US citizens understand that you do not deter your enemies by attacking your allies. Some bipartisan initiatives in the US Congress bear witness to this hope. Who knows, even if foreign policy is not usually the biggest issue in mid-term elections, maybe it could play a positive role in 2026. No power is ever wielded forever.

The last consideration is, of course, contingent on US citizens themselves. The job for the Europeans –to come back to the question posed by Ambassador Daalder– is to do their own homework. This means discouraging the US from wrecking the transatlantic bond beyond repair and, at the same time, preparing for the maximum degree of self-reliance in the realm of defence. These tasks are not contradictory but rather mutually supportive.

Five guidelines that could lead to European success

There are five elements that would appear to be essential to achieve a genuine and rapid progress on the road to European maturity in defence when faced with a dramatic reorientation in US policy.

Closing the threat perception gap

The first element, perhaps the most fundamental one, is the need to focus on generating a much higher degree of shared threat assessment. Today, the gap between the perception of existential threat driving the security policy of Eastern flank countries, compared with a marked reluctance of states located further away from Russia to feel a sense of urgency, is simply too wide. The gap influences policy decisions, as seen during the sorry saga of trying to overcome the somewhat selfish, commercially-driven objections of Belgium to use Russia’s frozen assets in order to secure funds for Ukraine. The argument that Ukraine is de facto defending Europe’s borders from the Russian imperial onslaught and thus supporting it, requires extraordinary measures benefiting European security is perceived to be self-evident by, eg, Poles, Lithuanians and Swedes; but not so by too many others, including those hiding behind Belgian obstructionism.

To put it bluntly: the case for urgent decisions demanding short-term sacrifices to guarantee a long-term defence potential has not yet been internalised by all capitals. Hence the reluctance to commit substantial budgetary resources for defence investment. Without such a shift, given the absolute priority which should be assigned to defence today, Europeans will collectively fail to match their lofty declarations with concrete policies, generating real capabilities. The latter are badly needed in many domains, such as the equipping and training of sizeable combat-ready military forces, the ability to produce large amounts of ammunition, the development of long-range missile strike systems or UAV technologies, to name just a few. EU funds (which mainly include credit facilities) are fiscally helpful but will not resolve the hard budgetary choices facing governments.

The prospect of being forced to guarantee a credible defence in Europe without the traditional level of US support must act as a systemic shock to wake countries up from their comfortable complacency. Every single state in Europe is affected by the new reality. Russia is no longer hiding its malicious designs on the continent, which it would like to dominate or at least blackmail. When the former President Medvedev publicly calls for the abduction of German Chancellor Merz, only an intellectually challenged observer can claim that Putin’s regime is not a threat to Europe. It is conducting an aggressive hybrid war against everyone. Geographical location does not guarantee immunity from attacks which disrupt airports, incapacitate energy grids, threaten multiple elements of critical infrastructure or sow disinformation undermining electoral processes and democratic institutions.

Perfection as a true enemy of what is good (or realistic)

This leads to the second element that can be defined as accepting imperfection. Why? Because bridging a threat assessment gap in Europe must happen fast. Hence it must be achieved in a realistic manner; and realism advises that it is not wise to set the bar of congruence too high. It is not necessary to expect that the threat perception regarding a potential Russian military aggression against the Baltic states as considered in Eastern Europe will be exactly replicated in, say, Spain or Italy: and vice versa: one should not assume that public opinion in Poland or Finland will fully match the sentiments regarding the risks associated with instability in, eg, North Africa, prevalent in the countries of the Southern flank. However, what is right and rational is to ensure that there is a sufficient level of solidarity in all regions of Europe towards each other.

In this respect, The Elcano Royal Institute’s Luis Simón has introduced the extremely useful concept of fungibility in a recent article on the security dilemmas facing Spain: ‘Spain’s contribution to deterrence on the eastern flank should […] prioritise operational initiatives and capabilities that are fungible, which is to say useful both in terms of strengthening collective security in Europe and in terms of the three major strands of national defence […]’.[10] The principle of matching contributions of the same type and value comes from the world of finance, but it applies fully to the realm of defence as well, and certainly not only to Spain.

It could be argued that it is precisely this rule that has been used extensively in NATO’s policy deliberations. The concept of ‘360 degree’ security –meaning an agreement of all allies to deal with threats emanating from any direction and in any form (be it military, hybrid or terrorist in nature)– has shown how a circle between different regions can be squared on paper and politically. However, implementing the policy always depended on the availability of committed US assets and military tools. Therefore, while the policy remains relevant, if the US input can no longer be taken for granted or the US at least being seen automatically as the first responder in any European conflict, Europe must itself generate such military and financial resources as necessary to make it credible.

Accepting imperfection may also require a tolerance towards different approaches and forms of contribution to Europe’s collective security. It is unrealistic to expect too many countries to quickly develop a large number of mobile land units comparable to the US 82^nd Airborne Division. Military planners in a country like Poland have to accept the fact that the bulk of the early fighting on the Eastern flank –were a full-scale war with Russia to break out– would have to be carried out by Polish and German land forces, augmented by contingents from countries present in the North and East. But the same planners should not be forced to accept a situation in which large and rich countries located further away from Russia would fail to invest in preparing large and capable forces that would constitute the essential follow-on forces, ready to be deployed in the second phase of a conflict. This would appear to be the essence of the rule of acceptable imperfection.

Rewarding team players and disciplining spoilers and free-riders

The third element is strongly connected to the second. It centres on the imperative of exercising collective self-discipline by Europeans. Again, that a glaring vacuum exists today in this domain has everything to do with the fact that for decades Europeans have relied on the US to cajole and discipline free-riders and breakers of allied solidarity. When a problem proved too difficult to manage, subsequent Administrations have often simply thrown in US resources to fill the capability gaps affecting European security. The job should now fall on Europe itself.

What does this mean in practice? Surely, at least three things. First, countries that consistently undermine European security across the board –such as Hungary– must have costs imposed on them by other EU and NATO members. Otherwise, their disruptive policies, aligning them with adversaries such as Russia, will continue. Furthermore, they could generate a copycat effect. Blatant cases of wrecking specific projects of strategic importance for security on the continent –such as the issue of Russian assets– should also lead to consequences for the countries responsible. It is unacceptable not to invest in defence and then rely on others to cover gaps: an example is the case of asking for help with drones that disrupt airports.

Secondly, this principle should encourage all European countries to desist from excessive self-promotion at the expense of European and allied unity. Political initiatives with security implications for the entire continent should not be undertaken (ostensibly on behalf of Europe but actually for domestic political ends) without proper consultations and agreements with others. One example is the obsessive ‘telephone diplomacy with Putin’ stunts periodically performed by various European leaders. They lead to nothing, ignore the views of countries better placed to offer insights into the Kremlin’s strategy and disrupt unity.[11] Another is a proliferation of different formats, such as E3 or the Berlin group (in the context of Ukraine), each claiming a unique right to speak on behalf of others while more inclusive formats are readily available.

Third, to stiffen up solidarity and warn those that do not want to engage in teamwork, Europeans would be well-advised to reflect on the perils of self-imposed detachment. The undeniably serious costs of Brexit for the UK[12] and a poor economic performance in Hungary,[13] which frequently likes to align itself with Russia and China rather than with other Europeans, both suggest that there is something interesting to be considered. Unity and collective engagement are a much safer bet for all European countries.

Nothing succeeds like success: an indispensable belief

The fourth element that would help all the efforts to beef up European security is self-belief. There is too much pessimism regarding the ability of Europeans to provide the bulk of their defence capabilities. Again, it would help to define the level of ambition properly. It is neither feasible nor necessary to match the full spectrum of US capabilities. The measuring rod has a different name: Russia; and outperforming Russia is not an impossible task by any means: economically it is not the USSR and its GDP is smaller than the combined GDP of Poland and Spain.[14] Its corrupt and militarised economy is having difficulties keeping up with Ukraine’s war effort. Technologically, Moscow is propped up by China and in the long run cannot compete with Europe. But only on the condition that the latter show a real political will to translate their combined potential into a genuine defence deterrent.

Moreover, the efforts already undertaken by a growing number of countries to catch up after years of underinvestment in defence are beginning to bear fruit. Poland and other frontier states (including new members Finland and Sweden) have shown the way in defence spending, becoming NATO leaders in this regard. Germany is on the cusp of a momentous change, finally gearing up its industrial and technological engine to produce defence capabilities worthy of Europe’s largest country. France has decided to concentrate more on investment in sophisticated equipment at the expense of size. The UK has not yet crossed the Rubicon that only a far bolder expenditure can guarantee. But, even so, both nuclear powers already offer a meaningful array of formidable military tools. Taken together, these defence reorientations have created a momentum for the rest of the continent. Now is the time for others to join the relay, as a minimum in line with the fungibility principle described above.

Old mechanisms may not work: try something new

The fifth element centres around boldness and novelty. If necessity is really the mother of invention, then Europe has a unique chance and needs to think outside the box. By taking centre stage, security concerns should release the energy necessary to harness technological innovation and greater competitiveness. Investment in defence production will likely stimulate economic growth and modernisation. Europeans can speed up their defence modernisation by innovating and exploiting a variety of existing national capabilities into a network of available combat-ready units even without a full reliance on the US. They can improve the collective calculus by drawing on Ukraine’s unique experience and battle-hardened expertise. With the right guidance and resources, engineers and programmers in Europe can develop defence technologies that leap ahead by several generations, drawing on the continent’s deep reservoir of scientific expertise. If the US continues to prefer to go it alone there is no reason not to combine European strength with that of its partners and allies on other continents –think of Australia, Canada, Japan or South Korea, for a start–.[15]

Boldness in thinking and acting should not just be reserved for defence capabilities and technologies. Now, for example, is the time to revisit certain international agreements that hinder effective defence, such as the Law of the Sea, which simply cannot counter the challenge posed by the shadow fleet used for sanctions evasion and hybrid warfare.

Conclusions

A sporting metaphor could be useful. As in a good football team, if Europeans are to answer the call to provide more for their defence, they need to see themselves as players with different skills and talents. Some can pass the ball and be creative, others can show physical strength to go and defend shoulder to shoulder, and then there are those who can score goals given few opportunities. In other words, diversity and an intelligent acceptance of the imperfection that characterises Europe can be used to advantage. But all countries must perform, with no room for idle talk and pretending rather than delivering. The Trump Administration’s disdain towards Europe has thrown the transatlantic alliance into disarray. However, turning this existential crisis into a real opportunity is not just a slogan but the only sensible strategy open to Europe.

[1] Ivo Daalder (2025), ‘Europe’s 5 stages of grief’, Politico, 30/XII/2025.

[2] ‘National Security Strategy’, 2025-National-Security-Strategy.pdf, The White House, XII/2025.

[3] Nicholas Vinocur (2026), ‘Europe’s top leaders rally to defend Greenland against Trump’s threats’, Politico, 6/I/2026.

[4] Alex Raufoglu (2025), ‘US promises pre-Christmas arms boost for Ukraine, pushes for Europe-led NATO by 2027’, Kyiv Post, 5/XII/2025.

[5] In a recent poll there were more Poles registering distrust towards the US President than not. In Poland this can be considered quite unprecedented; see Filip Waluszko (2026), ‘Sondaż OGB: Polacy ocenili Donalda Trumpa i USA w roli sojuszników’, Business Insider, 2/I/2026.

[6] NATO’s Secretary General has mentioned the 2030 date in a recent speech. See ‘Keynote speech by NATO Secretary General Mark Rutte and moderated discussion with Minister for Foreign Affairs of Germany Johann Wadephul’, NATO, 11/XII/2025.

[7] ‘Paris Declaration – Robust security guarantees for a solid and lasting peace in Ukraine’, Élysée, 6/I/2026.

[8] Even reports that question different elements of the US allied commitments are noticeably clear in extolling the benefits of working with partners to compete with China. For example: ‘[…] if Washington consistently pursues a statecraft that undermines allied trust in the United States, allied leaders will not support U.S. global objectives, weakening America’s hand in competition with China’. Quoted from Christopher S. Chivvis, Kristin Zhu, Beatrix Geaghan-Breiner, Maeve Sockwell, Lauren Morganbesser & Senkai Hsia (2025), ‘Legacy or liability? Auditing US alliances to compete with China’, Carnegie Endowment, 8/X/2025.

[9] See Ronald Reagan Presidential Foundation & Institute, 2025 National Defense Survey Executive Summary, About the Survey, XI/2025.

[10] Luis Simón (2025), ‘Finding the balance: Russia, the South and the future of Spain’s defence’, Elcano Royal Institute, 26/XI/2025.

[11] Following a predictable initiative by President Macron, the Italian Prime Minister has now jumped on the bandwagon; ‘Meloni urges Europe to talk to Russia, sees no swift return to G8’, Reuters, 9/I/2026.

[12] For a thorough review of the losses suffered by the British economy as a result of Brexit see ‘Brexit has deepened the British economy’s flaws and dulled its strengths’, The Economist, 30/XII/2025.

[13] A relative decline of Hungary in the last decade has been noted even outside Europe; see, for instance, ‘Poorest country in EU: once prosperous, Hungary is now the poorest nation in EU – meanwhile, this tiny nation tops the wealth rankings, The Economic Times, 20/VI/2025.

[14] See, for instance, World Economic Outlook (October 2025) – Real GDP growth, IMF, XI/2025.

[15] The author wrote about the opportunities offered by increased security coordination and cooperation between NATO allies and Indo-Pacific partners in a report published in 2024; see Robert Pszczel (2024), New horizon Implications for Poland’s security of NATO’s approach to the Indo-Pacific’, OSW Centre for Eastern Studies, 1/VIII/2024.

La entrada The new US policy forcing Europe into greater self-reliance in defence: accepting imperfection but not failure se publicó primero en Elcano Royal Institute.

The challenge before the CJEU does not spell the end of the EU-MERCOSUR agreement, but it does introduce an element of unpredictability.

The ‘splitting’ of the agreement and national parliamentary scrutiny

One of the two central elements of the legal challenge is the so-called ‘splitting’ of the agreement. The European Commission, with the backing of the Council of the European Union, has chosen to divide the EU-MERCOSUR agreement into two separate legal instruments. On the one hand, a trade component of the agreement, considered to fall under the EU’s exclusive competence and therefore subject only to approval by the Council of the EU and the European Parliament. On the other hand, an Association Agreement that includes not only the trade component but also the political and cooperation components, which does require ratification by the national parliaments of the Member States.

MEPs who promoted the challenge argue that this division is legally questionable. From this perspective, the splitting would make it possible to bypass national parliamentary scrutiny over provisions with far-reaching effects in areas such as agriculture, the environment, health regulation or labour standards. Parliament is asking the CJEU to clarify whether this fragmentation complies with the Treaties or whether, on the contrary, it infringes the principle of conferral of competences and the balance between the EU and its Member States.

The rebalancing mechanism and the EU’s regulatory autonomy

The second pillar of the challenge concerns the so-called ‘rebalancing mechanism’ included in the agreement. The mechanism would allow MERCOSUR countries to adopt compensatory measures if future EU regulatory decisions –for example in environmental, climate or health matters– were to result in a significant reduction of their exports to the European market.

Critics argue that this clause goes beyond a traditional trade instrument and could, in practice, affect the EU’s regulatory autonomy by exposing it to challenges or retaliation if it adopts new, legitimate public-interest regulations. What is being questioned legally is not the existence of adjustment mechanisms per se, but the fact that third countries could indirectly condition future EU regulatory decisions, which, according to the proponents of the challenge, could be at odds with the Union’s regulatory sovereignty as enshrined in the Treaties.

A narrow vote and a cross-cutting majority

The request for an opinion from the CJEU had to be approved by the European Parliament in a plenary session, as it concerns an institutional prerogative of Parliament as a whole. The result was extraordinarily close: 334 votes in favour, 324 against and 11 abstentions, which had the immediate effect of suspending the parliamentary approval procedure for the agreement until the Court delivers its opinion.

The challenge was supported by a cross-cutting coalition. The initiative was driven by the Greens/European Free Alliance (Greens/EFA) and The Left in the European Parliament–GUE/NGL (The Left) and received support from the Patriots for Europe (PfE) Group. Renew Europe (Renew) –which brings together liberal parties– was divided, with national delegations such as the French and Belgian ones supporting the challenge, while others argued in favour of a rapid ratification of the agreement. Isolated defections were also recorded within the European People’s Party (Christian Democrats, EPP) and the Progressive Alliance of Socialists and Democrats (S&D), while the European Conservatives and Reformists (ECR) granted freedom of vote (see Figure 1).

Figure 1. Results of the vote on the request for an opinion from the Court of Justice on the compatibility with the Treaties of the EU-MERCOSUR Association Agreement (EMPA) and the proposed Interim Trade Agreement (ITA)

The outcome of the vote on the challenge provides a preliminary indication of the political balance surrounding the agreement, but it does not automatically foreshadow the result of a future ratification vote in the European Parliament, as some MEPs supported judicial scrutiny as a legal precaution rather than as a substantive rejection of the agreement.

The judicial timetable and possible scenarios

The referral to the CJEU effectively postpones ratification of the agreement by the European Parliament. Although a vote had been envisaged for spring 2026, advisory opinion procedures before the Court typically last more than a year. The Court could opt for an in-depth examination of the allocation of competences and the institutional design of the agreement, which would reinforce a lengthy timetable. There is, however, the possibility of an expedited procedure, given the political and strategic nature of the agreement.

From a legal standpoint, the Court could validate the legal architecture proposed by the Commission and the Council, require limited adjustments or, in a more disruptive scenario, question the legal basis of the agreement as currently conceived.

A provisional entry into force

In parallel with these parliamentary and judicial dynamics, the Council of the European Union –which represents the Member States– had already authorised the European Commission to sign the EU-MERCOSUR agreement, which effectively took place on 17 January in Asunción. Following the European Parliament’s vote requesting the CJEU opinion, the European Council –a distinct institution composed of Heads of State or Government– expressed its political support for the possibility of a provisional entry into force of the agreement.

This option would allow the provisional application of the trade agreement –an area of exclusive EU competence– once at least one MERCOSUR parliament has completed its ratification, even while the CJEU examines the legality of the procedure. In this way, the European Commission places itself at the centre of the process as promoter and executor of the agreement, in a context of interinstitutional tension over timing, legal safeguards and democratic control of the treaty.

The reaction of MERCOSUR countries

The European Parliament’s decision was received with concern and caution in the MERCOSUR countries. Governments in the region stressed that the agreement had been renegotiated and concluded after more than two decades of negotiations, and that the legal challenge introduces a new element of uncertainty. Some governmental and business actors expressed fears that recourse to the CJEU could become a delaying tactic, while others emphasised that European judicial review is an internal EU matter over which MERCOSUR has little influence.

In this context, several MERCOSUR governments stated their intention to submit the agreement to their respective parliaments as soon as possible, with the aim of advancing national ratifications and exerting political pressure on the EU to activate the provisional application of the treaty. Overall, reactions have combined a defence of the agreement with a call for the EU to swiftly clarify its institutional position.

Conclusions

The challenge before the CJEU does not spell the end of the EU-MERCOSUR agreement, but it does introduce an element of unpredictability. In the short term, it delays parliamentary ratification; in the medium term, the Court’s opinion will be decisive in shaping how the EU can conclude major trade agreements in the future, reconciling its geopolitical ambition to be a key player in the new international order as a champion of cooperation and rules-based trade –as embodied in agreements of this kind– with legal certainty and democratic legitimacy.

La entrada The European Parliament halts the EU-MERCOSUR agreement in court: what is at stake se publicó primero en Elcano Royal Institute.