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Key takeaways from the 2025 NATO Summit
In this episode of Europe in :60, Carl Bildt discusses the outcomes of the NATO Summit and where Europe stands with the Israel-Iran conflict.
Russian President Vladimir Putin shakes hands with Iranian Foreign Minister Abbas Araghchi during a meeting at the Kremlin in Moscow, Russia, on June 23, 2025.
What We’re Watching: Iran meets with Putin, NATO gathers at the Hague, Venezuela targets black markets
US bombing of Iran creates Russian conundrum
Russian President Vladimir Putin welcomed Iran’s foreign minister on Monday, offering rhetorical support for Tehran – but it’s unclear what more the Kremlin is willing to do for its last major Middle Eastern ally right now. Putin has cultivated good ties with Iran, but also with Israel. At the same time, with Washington focused on Iran, Russia continued to hammer Kyiv with airstrikes over the weekend. Just days ago, Putin openly declared that the “whole of Ukraine is ours” – does he think the end goal is in sight?
NATO allies meet for an uncomfortable summit
Defense expenditure will be the top agenda item when leaders of 32 countries – all from Europe and North America – gather at the North Atlantic Treaty Organization summit tomorrow in the Hague, Netherlands. Ahead of the gathering, the group agreed to increase its defense-spending target from 2% to 5% of GDP, but granted an exception to Spain due to the prime minister’s political problems at home. Questions about the strength of the alliance are swirling: US President Donald Trump has sparred with his NATO allies for years now, and there’s no sign that the tensions will subside – his decision to bomb Iran undercut European efforts to foster a truce in the Middle East.
Venezuela cracks down on black markets – could it backfire?
The Venezuelan government has arrested dozens of people, including former top officials, in a crackdown on the country’s sprawling black market for dollars. Authorities blame off-the-books dollar traders for destabilizing the exchange rate, but experts say that the government’s economic mismanagement, coupled with US sanctions, means that black markets are the only way to satisfy popular demand for greenbacks. Stamping out those channels could, they warn, make things worse. Venezuela’s inflation rate has already surged past 200% this year.
Is Europe in trouble as the US pulls away?
Ian Bremmer's Quick Take: I want to talk about the transatlantic relationship. The US relationship with Europe. Because of all of the geopolitics in the world, this is the one that I think has been impacted in a permanent and structural way in the first two months of the Trump administration. I wouldn't say that, for example, look at the Middle East and US relations with Israel, the Saudis, the Emiratis, the rest of the Gulf States, frankly, all very comfortable with Trump. If there's a significant change, I would say it's incrementally more engaged, and in terms of worldview than under the Biden administration. Japan, South Korea, Australia, India, you look at Asia relations and certainly Trump and the US on trade worrying them, making them sort of react in a more defensive posture. Seeing how much, how more quickly, they can get something to the US that will lead to trying to diffuse potential conflict there. But not radically different from the way they thought about the United States in 2017 in the first Trump term.
Mexico, Canada, Panama, here you've got countries that are facing very significant challenges from the United States, but also ultimately understand that they have no other options. Now, in Canada, that's a bigger fight because there are elections coming up at the end of April. But after those elections are over, I certainly expect that they will move quickly to try to ensure that ongoing relations are functional and stable. That's already true for the Mexican government with a president who has 85% approval, can do pretty much everything necessary to ensure that US-Mexico relations aren't dramatically impacted by everything Trump is demanding. So that's everywhere else.
But in Europe, that's just not the case. Three different reasons why the Europeans are facing a much more permanent impact. The first is on the trade side, like everybody else, and trade is well within the European Union's competency. They understand that they have leverage. If the Americans are going to hit them with significant tariffs, they're going to hit back with the same numbers. But that doesn't mean it's going to be relatively difficult and take a long time to resolve it, as opposed to places that are much weaker where they just fold quickly to the United States. Okay, fair enough. But still, that's not all that dramatically different from first term. Second point is there's a war going on in Ukraine, and the United States has made it very clear that they want to engage, to re-engage with Putin, who is Europe's principal enemy. And they're going to do that irrespective of how much the Europeans oppose it, and they're not going to take any European input in those conversations.
Trump would like a rapprochement with Russia to include a Ukrainian ceasefire. But if that doesn't happen, he is oriented towards blaming the Ukrainians for it, towards taking Kremlin talking points on Ukraine not really being a country, and then on moving to ensure that US-Russia relations are functional again. All of that is deeply concerning, is existentially concerning, particularly for a bunch of European countries that are on the front lines spending a lot more in defense, not because the Americans are telling them to, but because they're worried about Russia themselves, feel like they have to be more independent. Then finally, because Europe is the supranational political experiment that relies most on common values and rule of law, and the United States under Trump is undoing that component of the US-led order specifically.
I wouldn't necessarily say that about collective security or existing alliances and willingness to provide some sort of defense umbrella, but I would certainly say that in terms of rule of law and territorial integrity. And here, the fact that the United States no longer really cares about territorial integrity, is prepared to tell Denmark, "Hey, you're not a good ally. You're not defending Greenland. We're interested in moving forward ourselves, and we don't care how you've treated us historically. We're going to send our leaders and we're going to cut our own deal inside your territory." That's exactly the way the Germans felt when JD Vance said that he wanted to engage directly with the Alternatives für Deutschland, who the Germans consider to be a neo-Nazi party.
Everything that's core to the Europeans in their statehood and in the EU, the United States under Trump is on the other side of that, and it's increasingly conflictual. It's directly adversarial. And so I would say number one, the Europeans are aware of these problems. Number two, they're taking them late, but nonetheless finally very seriously. And so they understand that the Europeans are going to have to create an independent strategy for their own self-defense, for their national security, for their political stability, for their democracies, and they have to do that outside of the United States. In fact, they have to do that and defend themselves against the United States.
Now that reality doesn't mean they're going to be successful. And indeed, the more summits I see on Ukraine, frankly the less I have been convinced that the Europeans will be able to do enough, quick enough to really help Ukraine dramatically cut a better deal with the Russian Federation that is very uninterested in doing anything that is sustainable for the Ukrainians long term. It makes me worry that the EU longer term is not fit for purpose in an environment where the principle, the most powerful actors don't care about rule of law. The United States, China, and for Europe, Russia right on their borders. So for all of those reasons, I mean, the European markets have gone up recently. European growth expectations have gone up because the Germans and others are planning on spending a lot more, that's short-term. Long-term here. I worry that the Europeans are in an awful lot of trouble. So something we'll be focusing on very closely going forward over the coming weeks and months. I hope you all are well, and I'll talk to you all real soon.
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Is Europe finally ready to defend itself?
Carl Bildt, former prime minister of Sweden and co-chair of the European Council on Foreign Relations, shares his perspective on European politics from Tabiano, Italy.
How serious is Europe about really beefing up its defense and rearming?
It is very serious indeed, although it's different in different parts of Europe. If you look at the EU countries, they have been increasing their defense spending over the last few years by roughly a third. That's a hell of a lot of money.
And if you look forward, I think there's a division between, say, Germany, Poland, Nordic Baltic states. You will see substantial further increases in defense spending there. There's more a question mark in the Mediterranean region, Greece support, where there is more hesitancy to do the rapid buildup of forces that is required.
Then, there is the problem of integrating defense industries and integrating command and control efforts. But we are undoubtedly at the new stage when it comes to developing serious integrated European defense capabilities, hopefully, to operate them together with the United States. But, as things are, also have the ability to operate them in the future more independently.
Germany's chancellor-in-waiting and leader of the Christian Democratic Union party Friedrich Merz reacts as he attends an extraordinary session of the outgoing lower house of parliament, the Bundestag, on March 18, 2025.
Germany’s vote to boost military spending makes history
Since the end of World War II, the subject of military buildout has been politically taboo – first in West Germany and then in reunified Germany. But Russia’s invasion of Ukraine and hints that US President Donald Trump might pull support for Kyiv and take a reduced role in NATO have changed German minds.
On Tuesday, a two-thirds majority in the Bundestag, Germany’s parliament, made history by voting to sharply increase defense spending – by exempting it from limits on the country’s assumption of debt. Germany’s upper house, the Bundesrat, is widely expected to approve this change with a vote scheduled for Friday.
This vote would have failed a week from now when the new Bundestag, with members chosen at the February national elections, is seated, because the country’s far right and far left each oppose the move and would have had the one-third of votes needed to block it. Instead, incoming Chancellor Friedrich Merz has scored a resounding political victory.
It’s also big news for Europe and for Ukraine. A decision on Tuesday by NATO members Poland, Lithuania, Latvia, and Estonia to withdraw from the Ottawa Convention that bans anti-personnel landmines and to begin stockpiling them underlines the current sense of alarm in Eastern Europe over Russia’s future military plans. A surge in German military spending can persuade other NATO members that the money they spend on European security and the defense of Ukraine is less likely to be wasted.French President Emmanuel Macron at the Elysee Palace in Paris, France, on March 17, 2025.
France’s Macron calls on Europe to stop buying American military equipment
Amid Europe’s growing rift with President Donald Trump, a French lawmaker this weekend called on the United States to “give us back the Statue of Liberty” now that Americans “have chosen to side with the tyrants.”
But French President Emmanuel Macron came out with a more concrete plan to split with Washington. In interviews published Saturday in several French newspapers, Macron said he intends “to go and convince European states that have become accustomed to buying American” to purchase European missile systems and fighter jets instead.
"Those who buy Patriot should be offered the new-generation Franco-Italian SAMP/T. Those who buy the F-35, should be offered the Rafale,” he told Le Parisien. “That's the way to increase the rate of production.”
While Belgium and the Netherlands still plan to buy new F-35s, Portugal is wavering on replacing its F-16s with the next generation of Lockheed Martin fighter jets, suggesting last week that it may look for European alternatives.
Not just Europe. Canada’s new Prime Minister Mark Carney last week ordered his government to review its deal to buy as many as 88 American F-35s. So far, Ottawa has budgeted to buy only the first 16 planes.
Potential winners? Macron said he asked European defense contractors to find ways to reduce costs. But Turkey could prove a major winner of any European decoupling from the US. This month, the leading Turkish drone manufacturer formed a joint venture with one of Italy’s biggest weapons manufacturers. Leaders in European capitals and Ankara are now calling for closer defense ties.German Chancellor-in-waiting Friedrich Merz speaks to the media after he reached an agreement with the Greens on a massive increase in state borrowing just days ahead of a parliamentary vote next week, in Berlin, Germany, on March 14, 2025.
Germany drops debt brake, passes preliminary agreement to boost defense, infrastructure, and climate spending
What is the debt brake? A measure that requires the federal and state governments to maintain balanced budgets, effectively prohibiting them from borrowing a penny more than they can repay.
This is a big deal historically in a country that has been committed to fiscal responsibility and pacifism since its out-of-control defense spending in the run-up to World War II. The package allows for “necessary defense spending” above 1% of GDP to be exempt from debt limits, a measure Germany feels is necessary as Europe takes the reins on its own security in the wake of the US withdrawing support.
It's also a major policy victory — along with a significant amount of debt — for the incoming parliament before it even assumes power. Far-right and far-left parties have criticized the move as “deeply undemocratic,” arguing that such a sweeping fiscal measure shouldn’t be passed before the new government, in which they will have greater influence, is in place. While parliament is aiming to form a new government by late April, mid-May is a more realistic timeline.
Does Canada need to prepare for a US attack?
Borderline frenemies meet in Quebec for the G7 as Canada begins thinking the unthinkable: how to defend against a US attack.
You know things are going badly when the first thing Secretary of State Marco Rubio has to do on his G7 visit to Canada is deny his intention to invade. “It is not a meeting about how we’re going to take over Canada,” he said, though no one believed him.
Why would they?
President Donald Trump’s mantra includes daily insults, threats, and acts of disrespect toward Canada as he launches his destructive trade war. But for a guy who’s all about high walls and protected borders, he has a very different view of it when it comes to his northern neighbo(u)r, dismissing it as an “artificial line” drawn “with a ruler.” “When you take away that,” he said this week in a moment of empire-building fantasy, “and you look at that beautiful formation of Canada and the United States, there’s no place anywhere in the world that looks like that.”
I have no clue what he means by that whole “beautiful formation” thing, but our hardcore GZERO trivia fans deserve a short backgrounder on the actual formation of the US-Canada border.
Since the Treaty of Ghent (oh yes, I’m going there!) ended the War of 1812, the boundary between Canada and the US has been relatively stable. Sure, some fellow history buffs will point out the border was tested in 1816 by the humiliating construction of a US military battery dubbed “Fort Blunder,” a battery mistakenly built on Canadian soil that had to be moved south, where it is now called Fort Montgomery. But we survived that tiff. Later, in 1842, the Webster-Ashburton Treaty (stay with me here) clarified the border with better surveys, and in 1909, the Boundary Waters Treaty determined how the Great Lakes would be divvied up. Since then, there have been updates and a few disputes, but prime ministers and presidents have happily memorized what might be called the Psalm of the 49th parallel, which starts with the famous line, “This is the longest undefended border in the world.”
So no, these are not artificial lines but ones mutually agreed upon in legally binding treaties. The nub is that President Trump has shown he doesn’t care about treaties, even ones he signed himself, like the USMCA back in 2020. He prefers the law of the jungle, where strong countries take what they want from weaker ones. And Trump wants Canada. He has repeatedly claimed that Canada would not be “viable as a country” without US trade, which is why his stated strategy is to annex Canada by “economic force.”
Trump’s administration regularly amplifies his imperialist sentiments. This week, White House Press Secretary Karoline Leavitt made the case that Canada should become a state to avoid tariffs, while US Commerce Secretary Howard Lutnick went on TV after Ontario Premier Doug Ford threatened to slap a 25% tariff on electricity to three northern US states, saying the best way to get a good trade deal with the United States is to “consider the amazing advantages of being the 51st state.”
It’s no wonder that Prime Minister Justin Trudeau, who leaves office tomorrow, concluded this is about taking over Canada: “What he wants is to see a total collapse of the Canadian economy because that’ll make it easier to annex us.”
When Rubio arrived in Canada for the G7, his Canadian counterpart, Foreign Affairs Minister Mélanie Joly, was not in a joking mood. “If the US can do this to us, their closest friend, then nobody is safe,” she said. Her colleagues in the EU have already absorbed that message, which is why they are talking about a European-run nuclear shield and a massive buildup of their collective defense forces.
It was almost sad to see how the secretary of state tried to spin Trump’s agenda in a bid to lower the temperature. “He says if they became the 51st state, we wouldn’t have to worry about the border and fentanyl coming across because now we would be able to manage that,” Rubio said.
Oh, thanks a bunch.
Annexing Canada is necessary because less than 1% of the illegal fentanyl that enters the US goes across the northern border? By that logic, Canada should annex the US because of the inflow of illegal guns from the US. It is madness, of course, but it’s a madness that is now being measured.
Angus Reid recently conducted a poll on the idea of annexation, and about 60% of Americans oppose it (including 44% of Trump voters), and about 30% would be interested only if Canadians supported the idea. They don’t. In the same poll, 90% of Canadians reject the idea outright, with one interesting exception. “One-in-five would-be CPC voters say they would vote yes, compared to almost zero Liberal (2%), NDP (3%), and Bloc Québécois (1%) voters,” reports Angus Reid.
Still, all this thought about annexation has the defense department in Canada running through scenarios they never imagined possible just months ago: what to do if the US ever attacked.
Trump has questioned the border lines in the Great Lakes, so what if US Coast Guard vessels started to cross that line and test the boundary? What about around the coast or in the Arctic?
Canada suddenly realizes — far too late – that the 2% GDP goal on defense spending is no longer aspirational but urgent. But what kind of military does it need? To find out, I spoke to retired Vice Admiral Mark Norman, the former vice chief of defense staff in Canada and currently a fellow at the Canadian Global Affairs Institute.
I’ve edited the conversation for this article.
GZERO: Some argue the US is still an ally, but others say we have to treat the US as a foe, one that could even potentially attack Canada. How would you describe the situation?
Norman: We’re outside the guardrails. To put it in nautical terms, we’re in completely uncharted territory here. What’s real and what’s not? How do you interpret what we’re hearing? How do we not overreact? There are many Canadians, both in the public domain and in the machinery of government, who I believe are banking on the faint hope clause, if I can put it that way, meaning they think that things will go back to the way they were. I think that is naive and irresponsible going forward. I don’t believe this is sort of a blip in the evolution of geostrategic affairs, specifically as it relates to the Canada-US relationship. I think we’re seeing a significant change — one could argue it’s almost a pivot.
Look at the Ukrainian situation and the public abandonment of European security. Then look at the ongoing threats of annexation as it relates to Canada.
Canadians have grown up far away from the kinds of threats to physical security and other types of security that many of our global neighbors have had to deal with. We have lived under the umbrella of the United States, and we have taken that for granted. There is some substance in the complaints that are being levied against us. The challenge is the nature of both the threats and the ongoing actions, and what that potentially means for us. I am concerned that the nature of Canada-US relations is changing fundamentally.
What could it look like?
There are two scenarios here, and there is risk in oversimplifying this ... One scenario is that this is simply transactional. This is Trump’s attempt to try and get us to do a bunch of things to up our game, our spending – to do more and contribute more. One could argue this transactional approach, this negotiating tactic, will lead to some magic tipping point at which everything falls into place, and we have some sort of agreement. That is scenario A.
Scenario B is the most threatening scenario. We’ll call it annexation. Not sure what that looks like, specifically, but we take this to mean that in some way or form, the United States is exercising a significant degree of control over what we would have traditionally seen as sovereign decisions made by Canada.
From a military perspective, much of what we would need to do is actually independent of those two scenarios. So we either have to step up and satisfy a whole series of unclear expectations on the part of the current administration, everything from border security to Arctic security to all these other things, or we’ve got to up our game, because if we don’t, then we risk the threat of some sort of loss of control.
I have difficulty imagining scenarios whereby Canada would be invaded or that Canada could respond to something like scenario B. I think there will be coercion. I think there are lots of tools left in Trump’s toolbox to coerce us and threaten us and basically put us off-balance and cause us to react. What’s interesting is we’re either on our own, at which point we need to do a hell of a lot more than we’re doing now, or we’re in the process of being shaken down, which also means we need to do a hell of a lot more. Those will be preconditions for what would be even the most benign and benevolent version of events.
So Canada has to rebuild its military one way or another?
Let’s start with national capacity, domestic capacity, and industrial capacity. One of the unintended consequences of the Ukrainian conflict has been the incredible growth in Ukrainian domestic capacity, notwithstanding the fact that they’re waging what many argued was an unwinnable war against a superpower with one of the largest armies in the world. A lot of that has to do with innovation, engineering, and agility, which has now made them a significant player in the European defense industry. It is particularly relevant to the Canadian situation, where a lot of our military capacity is tied to US technology. I think this is a huge vulnerability for us going forward, even if we were to find ourselves in scenario A. We cannot and should not rely on others for a lot of the stuff. Now, we cannot do everything, but there are enormous alternate sources of technology in our European and Asian partners. And we have to do a much better job of leveraging our own industrial capacity. What are we really good at? We’re really good at things related to AI, acoustic processing, and communications. We’re very good at things related to satellite technology. We have a number of emerging capabilities in unmanned systems, be they airborne or surface, and even underwater capabilities. We have enormous advantages in terms of understanding the technical challenges of the Arctic. It is our backyard. In military terms, we are good at combat management systems. So think of the computer architecture that allows you to do what you need to do from a command and control perspective.
Is the point that Canada will have to build a new type of military faster, cheaper, and less dependent on the US and use more innovation?
Canada will definitely need to explore alternative solutions, like drone capacity, to address the challenges of defending vast territories. But it will still need icebreakers, a navy, and tanks. It’s a new world. One other factor here. You need to be able to deploy and sustain your forces. A lot of people don’t think that’s sexy, but the reality is, this is all about logistics, and this is all about sustainment, which means you have to have an industrial base. You look at the kinds of distances that we’re dealing with in Canada — these are massive distances. These are not insignificant challenges, and we’ve never really dealt with them. You need to be able to control what’s going on. Do you just simply want to monitor what’s going on, or do you want to be able to influence what’s going on? This is where you get into the pointy ends, the more kinetic discussions around what are the hard capabilities that you need and don’t need, but you have to have all that other stuff sorted out first. The reason the Ukrainians are so effective in these asymmetric conflicts is because they figured out a lot of that back-end stuff. Canada needs to do that too.