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Lettering on a logo of the European Union, AI-Act, the symbolic image for the laws and regulation of artificial intelligence in Europe.
Europe’s AI Act starts to take effect
As of Sunday, companies in Europe cannot legally use AI for facial recognition, emotion detecting, or scoring social behavior. The penalty is steep: up to $36 million in fines or 7% of global annual revenue.
The AI Act was formally adopted in September after years of deliberation in the European Union’s deliberative bodies. This is the first major government to bring comprehensive AI regulation to bear, and the rest of the law’s provisions will roll out over the next year and a half.
Europe had already gone much further on AI safety than the US federal government under Joe Biden, but with Donald Trump in office — who recently scrapped Biden’s safety-focused AI executive order — the gap in regulation between America and Europe promises to be even greater.
Trump has vowed to retaliate against the EU over the AI Act, which he previously called a “form of taxation,” but that threat wasn’t enough to deter Brussels from plowing ahead.
EU rolls back Syria sanctions for economic rebound
Carl Bildt, former prime minister of Sweden and co-chair of the European Council on Foreign Relations, shares his perspective on European politics from Abu Dhabi, UAE.
Is the European Union opening up to cooperation with the new government or regime in Damascus?
Yes, they are gradually. The foreign minister of the European Union took the decision early this week to start to ease sanctions on Syria that have been in place for years. And that is very important in order to start to get the economy going in the country. And that, of course, is very important in terms to start addressing all of the humanitarian needs. And also, eventually getting the economy going so that at some point in time perhaps people can start to move back to the country that they were forced to flee from during the years of civil war and repression.
Why was the prime minister of Serbia sacked?
That was part of a bigger move, defensive move, you can say by the president, by President Vučić. He has been under intense pressure due the last few months. There was an accident in Novi Sad, the second-biggest city that was blamed on the roof fell in, and that was blamed on bad construction and corruption. That has crystallized massive opposition to his regime, which has been there for a long time and is seen as increasingly authoritarian. So, pressure has been building up and he was now forced to concede sacking the prime minister and announcing new elections in April. So new elections in April in Serbia. There will be elections in Kosovo before that. There will be elections also in Albania. So, a lot of things are in flux in the Southern Balkans.
At Davos, all eyes are on Trump
Carl Bildt, former prime minister of Sweden and co-chair of the European Council on Foreign Relations, shares his perspective on European politics from Davos, Switzerland.
What’s been going on here?
It’s been Trump, Trump, Trump, Trump. It’s been very much dominated by assessments, curiosity, concern about the transition in the US. A lot of businessmen are fairly, sort of, upbeat. They think there’s sort of a deregulation and lower taxes, that’s good. Economists are more worried. Debts and deficits, that’s not good. And those dealing with geopolitics, like myself, are deeply concerned.
Is he going to go to war with Denmark over Greenland? What’s going to happen with the Panama Canal? Is their Middle East policy that is credible? And what is he really up to when it comes to dealing with Mr. Putin on Ukraine? There are lots of questions, lots of concerns. But, upbeat assessment, in spite of that.
Container ships in front of the port of Bremerhaven.
How scared should the world be of Trump’s economic threats?
On Wednesday, President Donald Trump used his social media platform to threatenVladimir Putin with “high levels of Taxes, Tariffs, and Sanctions on anything being sold by Russia to the United States” unless he struck a bargain over Ukraine.
There’s just one problem: Russia has very little trade with the US. Americans imported just $2.8 billion in goods from Russia from Jan. to Nov. 2024, less than a tenth of the pre-war figure and less than 1% of all US imports over the same time period. The extensive sanctions already in place have hardly brought Moscow to its knees, and arguably benefited US rivals like China, Iran, and North Korea. It’s tough talk, but it’s not likely to push Putin to the table.
China is a different story. Trade with the US added up to an average of $54 billion per month in 2024, and the 60% tariffs Trump threatened to put on China on the campaign trail would cause severe damage to both economies. That may be why Trump is backing off the high sticker number and said Tuesday he is considering imposing at 10% tariffs on Chinese goods as soon as Feb. 1.
Now, 10% is a number that Beijing feels is much more manageable. China is experiencing price deflation — a really damaging phenomenon with one silver lining in that it could mean US consumers wind up paying about the same prices even if Trump hikes tariffs. The central government is also promising funds to stabilize the stock market in the face of potential tariffs and prevent investors from seeking safer shelter for their cash.
The fears are more real in Europe, where Trump threatened to impose tariffs without specifying a rate on Tuesday. Growth in the region’s most important economies is already stagnating, and even small barriers to trade with their most important partner will have serious consequences. Further economic troubles could empower far-right movements across the continent, which may suit Trump just fine. We have our eye on Germany, which will hold elections in precisely one month.
And don’t forget Canada and Mexico, which are staring down the barrel of 25% tariffs that Trump threatened on Tuesday as well. It’s creating a decidedly tense atmosphere in North America, with Canadian Prime Minister (for now) Justin Trudeau promising retaliation, which Mexican President Claudia Sheinbaum has hinted at as well.
The bottom line? You’re probably in for rising prices in the near future … unless everyone can come up with a reason for Trump to let them slide. We’re watching what Trump says when he speaks at the World Economic Forum in Davos on Thursday.
Polish Minister for European Affairs Adam Szlapka speaks during the presentation of the program for the 2025 Poland's Presidency of the Council of the European Union in Warsaw, Poland, on Dec. 10, 2024.
Poland calls for security self-reliance for Europe
With Donald Trump set to take office as US president on Monday, Poland is beginning its six-month presidency of the European Union with a warning: This is “the right time to say loudly that it’s time [for Europe] to take responsibility for our future and our security,” Poland’s Europe minister, Adam Szłapka, told the Guardian on Wednesday. Poland holds the rotating presidency from Jan. 1 to June 30, 2025.
Poland has long warned that many fellow EU members underestimate the threat that Russia poses for Europe, and with Trump now promising to broker a ceasefire agreement in Ukraine, Poland’s government wants to be sure Europeans understand the longer-term risk.
Szłapka warned of “a very difficult time” ahead. And though Polish officials are careful not to criticize Trump directly, at least until his approach to Russia, Ukraine, and the future of NATO becomes clear, Poland continues to insist that Europe can’t outsource its security to the United States indefinitely.
In fact, Poland’s defense minister has welcomed the incoming US president’s call for NATO member states to spend 5% of their GDP on defense. Poland is already NATO’s biggest defense spender – with 4.12% of GDP in 2024 and an expected jump to 4.7% this year.
It’s a reminder that while many Europeans are casting a wary eye toward Washington, Poland’s attention remains firmly focused on the Kremlin.
FILE PHOTO: Children eat bread on a street near a flag adopted by the new Syrian rulers, after the ousting of Syria's Bashar al-Assad, in Damascus, Syria, December 24, 2024.
Syria seeks sanction relief
Diplomats and foreign ministers from17 Arab and EU states convened in Riyadh, Saudi Arabia, on Sunday to discuss the lifting of economic sanctions on Syria, originally imposed during the rule of ousted president Bashar al-Assad. Removing the sanctionsis key to reconstruction efforts for Damascus but will hinge on the new government’s ability to guarantee human rights in the country.
After the meeting, German Foreign Minister Annalena Baerbockadvocated maintaining sanctions against Assad’s allies but alleviating restrictions that affect the general population. Baerbock alsopledged an additional $51.2 million in aid for essential services. EU foreign policy chief Kaja Kallas also announceda meeting of foreign ministers in Brussels on Jan. 27 to discuss further relief measures.
As for the US, while it has not lifted sanctions, last week it issueda six-month exemption for certain transactions with Syrian governing institutions to expedite humanitarian assistance.
We’re watching whether those measures will be extended under the new administration of US President-elect Donald Trump, who in December said that Syria’s change of regime is “not our fight.” Trump also remarked that“Turkey is going to hold the key to Syria” – something thatSaudi Arabia may take issue with as it positions itself as a key regional player in Syria’s rebuilding.
Austrian President Alexander Van der Bellen delivers a statement in Vienna, Austria, January 5, 2025.
Austria’s far right takes its first shot at government since World War II
Austria’s president asked the far-right, pro-Russia Freedom Party to form a government on Monday after talks between the traditional right and left parties collapsed over the weekend. The Freedom Party’s leader, Herbert Kickl, said he would begin negotiations with the center-right Austrian People’s Party, which had previously balked at playing second fiddle. The two parties are expected to be able to form a government now that former Chancellor Karl Nehammer from the Austrian People’s Party has stepped down.
The Freedom Party traces its roots to a former Nazi SS officer and politician, and like its peer far-right parties in Germany, France, and Italy, was heavily ostracized in the past. Now, Austria looks likely to join Hungary, Italy, the Netherlands, and Slovakia as part of a growing bloc within the EU ruled by populist rightwingers.
How would a far-right government change Austria? On a policy level, Vienna is already quite conservative, advocating hardline migration and fiscal measures for the EU. Austria will also likely continue trying to exploit sanction loopholes with Russia, but not totally undermine them, says Eurasia Group’s Jan Techau.
“There are also fears of Orbanization in Austria as the far-right people are very ardent culture warriors,” says Techau, referring to the weakening of democratic institutions under Prime Minister Viktor Orban in neighboring Hungary. “We are not sure how far this can go. Austria is not Hungary, it’s a federal system, not a centralized state, and political and civil society pushback can be expected.”
We’re watching what the Freedom Party’s success might say about the rise of the far right in EU anchor states France and Germany this year.
U.S. President-elect Donald Trump meets with Italian Prime Minister Giorgia Meloni at Mar-a-Lago in Palm Beach, Florida, U.S. January 4, 2025.
Meloni joins Trump at Mar-a-Lago — with Europe’s economy on the line
President-elect Donald Trump was full of praise for Italian Prime Minister Giorgia Meloni during her surprise visit to Mar-a-Lago on Saturday, calling her a “fantastic woman” who has “really taken Europe by storm.” The two caught a screening of a right-wing documentary and then had dinner. Meloni has a lot riding on making a good impression as Trump has threatened tariffs that would severely hamper Europe’s economic growth.
Neither side released details of what they discussed, but Meloni has been on a charm offensive since Trump won the US election. She also met with Trump at the reopening of Notre Dame Cathedral last month in Paris and has worked hard to establish a close relationship with key Trump ally Elon Musk. She has called Musk a personal “friend” and a “genius” who’s been wrongly maligned for supporting Trump – Musk even had to deny the two were in a romantic relationship in September.
The personal is political. Meloni has set herself up as a unique bridge between Brussels and Trumpworld, putting her in the driver’s seat as the European Union prepares to negotiate to buy more oil and gas from the United States, without which Trump has threatened “TARIFFS all the way!!!”
The problem? Europe already buys a ton of US hydrocarbons, so much so that industry experts don’t think the bloc can import more. We’re watching for other European leaders to give Meloni broad deference on her preferred migration policies so long as she can continue to play Trump-whisperer.