Control over infrastructure and institutions

The Week in Brief

The past week showed global competition shifting from declarations of principle to practical control—over infrastructure, production, and institutions. NATO translated its fear of Russia into financial commitments, arms procurement, AI investment, and a deeper bond with Ukraine; Kyiv turned Russia's energy facilities into a central theater of war; and China kept methodically expanding its aggressive activity around Taiwan. Meanwhile, governments and institutions under pressure chose different escapes: structural reform in Germany, changing the rules of the game in Zimbabwe, and a sharpening battle over the identity of the Catholic Church. The common denominator is the shrinking middle ground: states, alliances, and political movements must now choose between rapid adaptation to the new reality and a steady erosion of their power.

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Geopolitical Dynamics

A. NATO Tries to Turn Talk Into Action: The alliance's Ankara summit closed with a commitment of €70 billion in military aid to Ukraine in 2026, and at least a similar sum in 2027. Leaders reaffirmed collective defense and stressed that Ukraine is not merely an aid recipient but a source of experience and understanding of the modern battlefield. The US president even floated licensing Kyiv to produce American interceptor systems— though no practical agreement has yet been presented.

B. Turkey Collects the Summit Dividend: Hosting the summit let Ankara cast itself as the indispensable link between Europe, the US, and the Middle East. The US president again signaled he is weighing lifting the sanctions imposed over Turkey's purchase of the Russian air-defense system and revisiting its reintegration into the F-35 program. The legal and technological obstacles remain—but merely reopening the discussion has strengthened Turkey's bargaining power.

C. Taiwan Drags the Gray Zone Into the Light: China expanded its coast guard operations into waters east of Taiwan, far beyond its previous patterns. Taipei responded by inviting lawmakers from several countries on a maritime tour near the Kinmen islands, aiming to convert Chinese pressure from a bilateral matter into an international one. The struggle is not over any single maritime incident, but over whether China's aggression gradually hardens into permanent reality around the island.

Security and Threats

A. The Oil Superpower Runs Out of Fuel: Systematic Ukrainian strikes have knocked out roughly a quarter of Russia's refining capacity, producing queues, sales restrictions, and shortages across entire regions. Moscow banned diesel exports until the end of July and began importing gasoline—including at least 60,000 tons originating in India. The irony of depending on fuel refined from Russian oil and sold back to Russia shows that Kyiv has managed to shift part of the war's cost onto Russia's economic rear.

B. The Shadow Fleet Takes to the Air: A study of 144 drone incidents across Europe assessed with high probability that Russia ran a coordinated collection operation over military bases, nuclear facilities, and critical infrastructure. In some cases, a possible link was found between the drones' appearance and vessels identified with Russia's shadow fleet. Even without conclusive proof in every incident, the cumulative picture points to a significant European gap in detecting, attributing, and thwarting hostile activity below the threshold of war.

C. Hamas Gives Up the Government—Not the Gun: Hamas announced the dissolution of the emergency committee running Gaza's day-to-day affairs and a willingness to hand civilian authority to a technocratic Palestinian committee backed by the UN. The move may unlock progress on reconstruction and services, but it contains no commitment to disarm or to transfer security control. It is, at most, a possible stage in a governmental transition—in no way the end of the fight over the Strip's future.

Economy, Technology and Trade

A. NATO Becomes a Manufacturing Alliance: The Ankara summit announced arms deals worth at least $50 billion, alongside efforts to shorten procurement cycles, expand joint production, and harden supply chains. But bigger budgets alone do not buy military capability—the central challenge will be converting the money into fielded systems, stockpiles, and rapid production capacity.

B. Germany Tries to Restart the Growth Engine: The government unveiled a 34-point reform package: tax relief for households, a gradual rise in the retirement age, tighter sick-leave rules, labor-market flexibility, and a drive to cut bureaucracy. Alongside it come sweeping investments in defense, infrastructure, and strategic sectors such as chips and AI. Success hangs on the coalition's ability to pass measures that carry short-term social costs.

C. The Global Economy Survived the Shock—It Hasn't Escaped It: The IMF cut its global growth forecast for 2026 to 3% and raised its inflation forecast to 4.7%. Demand for AI technologies and adaptive supply chains cushioned the blow from the Middle East energy crisis, but global trade is set to slow. The forecast assumes a gradual reopening of the Strait of Hormuz—renewed fighting could quickly unravel the recovery.

D. NATO Turns AI Into War-Fighting Infrastructure: The summit advanced command-and-control networks integrating AI, sensors, drones, and strike systems, aiming to shrink the time between detecting a threat and making an operational decision. The concept leans heavily on the lessons of Ukraine, and moves AI from auxiliary tool to a central component of defending the eastern flank. The shift will deepen dependence on data, cloud infrastructure, and private technology firms—so the competition inside the alliance will not be only over arms production, but over control of the computing power, the models, and the standards that will shape the future battlefield.

Crises and Domestic Politics

A. The French Race Reopens: France's appeals court upheld the national-right leader's conviction for misuse of EU funds—but shortened her disqualification in a way that allows her to run in the 2027 presidential election. The conviction stands, and she is expected to appeal to the highest court. The ruling shifts the center of gravity from the legal question to the political one: whether the center and the left can unite against a party leading the polls.

B. Zimbabwe Changes the Rules of the Game: The president signed a constitutional amendment postponing elections from 2028 to 2030 and extending his term accordingly. The amendment also abolishes direct presidential elections, moving the decision to parliament. The government presents the move as a stability measure; its opponents see a direct assault on the public's ability to replace its rulers.

C. Schism Returns to the Vatican: A conservative Catholic group consecrated four bishops without papal approval, prompting the Vatican to declare that the group no longer belongs to the Church. The step cancels accommodations granted to the group in the past, and forces the priests and faithful who identify with it to choose between accepting papal authority and operating outside the recognized Catholic framework. The crisis reflects the broader tension between conservative currents and the Church's leadership.

“Surely goodness and mercy shall follow” (Psalm 23).

The Geopolitics Lab Team