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Slovakia considers retaliatory measures after Ukraine halts Russian gas transit

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Slovak Prime Minister Robert Fico announced on Thursday, 2 December, that the coalition government would discuss retaliatory measures against Ukraine for halting the flow of Russian gas through its territory to Slovakia.

In a video message posted on Facebook, Fico stated that the Smer party would consider cutting off electricity supplies to Ukraine, reducing aid to Ukrainian refugees, and demanding the restoration of gas transits or compensation for losses Slovakia claims to have suffered due to the cessation of Russian gas flows.

Russian gas exports via Soviet-era pipelines through Ukraine ceased on New Year’s Day when the transit contract between Russia and Ukraine expired, marking the end of Moscow’s decades-long dominance of European energy markets.

Slovakia has alternative sources of gas, but Fico emphasized that the country would lose its transit revenues and incur additional transit fees to import non-Russian gas. He also warned that gas and electricity prices in Europe would rise as a result of Ukraine’s actions.

Fico announced that a Slovak delegation would discuss the situation in Brussels next Tuesday, after which his ruling coalition would consider retaliating against Ukrainian President Volodymyr Zelensky’s actions, which he labeled as ‘sabotage’.

‘I declare that (my Smer-SSD party) is ready to discuss and agree in the coalition on the issues of stopping the supply of electricity and significantly reducing support for Ukrainian citizens in Slovakia,’ Fico stated.

The Slovak leader argued that the only alternative for a ‘sovereign Slovakia’ was to demand the restoration of transit or mechanisms to compensate for the loss of around 500 million euros in public finances.

Last week, Zelensky accused Fico of opening ‘a second energy front against Ukraine at Russia’s behest’.

Slovakia’s majority state-owned gas transit network operator, Eustream, reported revenues of €158 million and an after-tax profit of €25 million in the six months to 31 January, the latest period reported on its website.

State-owned Slovak gas importer SPP, which supplies about two-thirds of Slovak demand, stated on Wednesday that replacing all Russian gas this year would result in additional costs of about 90 million euros, mainly due to transit fees.

Slovakia, which borders Ukraine to the east, exported 2.4 million megawatt hours of electricity in the first 11 months of 2024 to Ukraine, which has been suffering from electricity shortages due to Russian bombardment, according to data from the Slovak grid operator.

Fico, who visited Russian President Vladimir Putin in Moscow on 22 December, said last week that Slovakia would consider reciprocal measures against Ukraine, such as halting back-up electricity supplies, if Kyiv stops gas transit from 1 January.

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Poland’s EU Presidency Begins: ‘Security and Defence’

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Ahmetcan Uzlaşık, Brussels

Poland assumed the presidency of the Council of the European Union for the second time officially on January 3, 2025, with a very political agenda. Over the course of its six-month term, Warsaw plans to host more than 300 official meetings across 24 cities, concluding on June 30. With an ambitious program centered on security, the presidency seeks to address escalating geopolitical challenges while shaping the EU’s policy direction. 

The Polish presidency has prioritized strengthening European security in multiple dimensions, including external, internal, informational, economic, energy, food, and health sectors. This leadership tenure is expected to see significant efforts to bolster the EU’s resilience against current global tensions. Assistant Professor at the University of Wroclaw and Senior Analyst in the institute of Central Europe Jakub Bornio talked to Harici about Poland’s EU Presidency and what it means for regional and global politics. 

A Relief After Hungary’s Controversial Term

Poland’s Council Presidency arrives at a pivotal moment for the EU, following Hungary’s controversial tenure, characterized by the Eurosceptic approach of Prime Minister Viktor Orbán and his controversial visits. EU leaders are now expressing relief as they transition to working with Poland under Donald Tusk, a committed pro-NATO and pro-EU leader. 

The Polish Presidency’s program outlines its priorities, stating: “In view of Russia’s aggression in Ukraine and other security threats, the work of the Foreign Affairs Council in the first half of 2025 will focus on maximizing support for Ukraine at political, military, and economic levels, maintaining current policies towards Russia and Belarus, and strengthening the security and resilience of the EU and its partners.”

It further emphasizes a commitment to transatlantic cooperation: “The Presidency will support the deepening of transatlantic relations. In particular, we are committed to EU-US coordination in the face of Russia’s aggression towards Ukraine and dialogue on global issues, including the Eastern Neighbourhood, China and the Indo-Pacific region, energy policy, new technologies, and the Connectivity Agenda.”

With these priorities, Poland’s leadership aims to reaffirm the EU’s unified stance on critical geopolitical challenges. However, questions remain about how Poland’s positions on Ukraine and NATO will be affected after the inauguration of elected President Donald Trump.

Poland Excludes Hungary’s Ambassador Amid Diplomatic Tensions

Poland barred Hungary’s ambassador from the opening gala of its EU presidency, citing a diplomatic dispute over former Polish deputy justice minister Marcin Romanowski, who fled corruption charges in Poland and was granted political asylum by Hungary in December. Hungarian Foreign Minister Péter Szijjártó called the move “pathetic and childish,” escalating tensions between the nations.

Poland’s Foreign Minister Radosław Sikorski deemed Hungary’s decision to grant asylum a “hostile act” and informed Hungarian Ambassador István Íjgyártó he was not welcome at the January 3 gala, hosted by Polish Prime Minister Donald Tusk and European Council President Antonio Costa.

“Europe Must Move Beyond Survival to a Political Offensive,” Said Tusk

Incumbent Prime Minister of Poland and former President of the European Council, Donald Tusk, emphasized on December 4, 2024, that the European Union must shift from a state of “survival” to a “political offensive.” Reflecting on the 13 years since Poland’s last presidency, Tusk underscored the importance of the current timing and addressed several non-routine priorities, including military, economic, energy, and health security, as well as the need to combat disinformation. 

“Breakthroughs are perhaps awaiting us regarding war and peace east of our border,” Tusk said, calling for a “profound correction” of European priorities.

“Poland’s Presidency Prioritizes Security and Sanctions”

Poland’s EU Council Presidency will emphasize security and defense, continuing its longstanding approach since Russia’s annexation of Crimea in 2014. “Poland’s priority will be to maintain and, to some extent, extend sanctions on Russia,” explains Jakub Bornio, Assistant Professor at the University of Wrocław and Senior Analyst at the Institute of Central Europe. Borneo said Poland will also focus on securing financial assistance for EU member states providing military support to Ukraine, leveraging the European Peace Facility.

However, Hungary’s veto on critical financial measures remains a challenge. “Without strong signals from the US, I’m not sure whether it will be quite easy for Poland to convince Hungary to ease its stance,” Bornio warns. Another key focus will be advocating for the exclusion of defense spending from EU budget deficit calculations, a necessity given Poland’s planned allocation of 4.7% of its GDP to defense by 2025.

Bornio also highlights broader security concerns: “Poland’s priorities include fighting illegal migration and the weaponization of migration, as well as addressing hybrid threats orchestrated by Belarus and Russia.” Additionally, Poland will push for NATO member states to allocate at least 3% of their GDP to military spending, requiring EU cooperation on financial rules.

“Both Poland and the U.S. depend on each other”

“I don’t see major changes coming, at least when it comes to security in the region. Both Poland and the U.S. depend on each other,” says Jakub Bornio, considering the re-election of Trump. While acknowledging Poland’s status as a junior partner in this alliance, he highlights that the country still possesses assets and capabilities that the U.S. values. As a result, U.S.-Polish relations are expected to remain strong in security matters.

However, Bornio foresees potential strains in personal relationships. “It is quite likely that these personal relations will be kind of harsh, and it may impact Poland’s ability to affect its relations with the U.S. It is not a secret that there are some animosities between the Polish prime minister’s camp and Trump’s camp,” he notes. This tension could also spill over into Poland’s ability to navigate U.S.-Germany relations, which Bornio predicts will be turbulent under Trump’s second administration.

Despite these challenges, Bornio emphasizes Poland’s commitment to maintaining strong ties with the U.S. “What we learned from our previous administration of Trump is that he is also going to favor bilateral ties rather than multilateral platforms,” he concludes.

“Polish Elections Will Not Change Security or EU Commitment”

“It will not change much when it comes to foreign and security policy,” Jakub Bornio says when discussing the upcoming Polish elections in 2025. Both the Civic Coalition and the Law and Justice Party have strong commitments to security, defense, and Poland’s continued EU membership.

“Both candidates believe that Poland should be a member of the EU and that security should be prioritized,” he adds, noting a consensus on these key issues.

However, Bornio points to potential challenges: “There are big hopes in the Law and Justice camp, currently in opposition, that their candidate will be supported somehow by Trump and his cabinet.” He also highlights the tension between the current Polish elites and Trump’s administration.

“Poland Won’t Prioritize Türkiye During This Term”

Türkiye is mentioned in two sections of the Polish Presidency’s program. Under the Foreign Affairs Council, the document highlights efforts to “keep the Western Balkans and Turkey in the orbit of close cooperation with the EU under the Common Foreign and Security Policy (CFSP), including by maintaining an ongoing political dialogue.” Additionally, under the General Affairs Council’s enlargement paragraph, the Polish Presidency commits to maintaining a “constructive dialogue with Turkey, taking into account its status as a candidate country and in line with European Council conclusions.”

Jakub Bornio discussed Poland’s approach to EU enlargement, noting that while Poland has long advocated for EU expansion, “I don’t see EU-Türkiye relations changing much in this half year.” Poland will focus on strengthening its ties with the Western Balkans, Moldova, and Ukraine. “Especially when it comes to Western Balkan states, association with the EU is quite possible and will be emphasized by the Polish presidency,” Bornio adds, while emphasizing that no significant changes are expected in the short term. He also predicts that the EU will play a crucial role in supporting Moldova and aims for a more balanced approach to Georgia.

Bornio also highlighted Poland’s cautious stance on Türkiye. He explained that Poland has supported Türkiye’s NATO presence in the Eastern Flank, where there is only a small unit deployed so far. However, he mentioned that hopes for stronger cooperation in security matters exemplified by the Bayraktar deals have not materialized and the weaponization of migration, a concern linked to Türkiye’s actions, has led to a cooler reception in Warsaw. “This was not very welcomed by Warsaw, so I don’t think Poland – regardless of its declarations, will prioritize Türkiye during this term.”

Trio Presidency System since Lisbon Treaty

The presidency of the Council of the EU rotates every six months among the member states. Each country that holds the presidency chairs meetings, helping to manage the legislative process. The presidency system also operates in “trios,” where three consecutive member states collaborate closely over an 18-month period to set long-term goals and prepare a common agenda. Although the Council Presidency does not possess any executive power, it is still important in the context of leadership and agenda-setting.

This system, introduced by the Lisbon Treaty in 2009, allows each country to focus on specific priorities within the broader context. The current trio includes Poland, Denmark, and Cyprus. Each presidency is tasked with driving forward EU legislation, ensuring smooth operations in the Council, and representing the Council in its relations with other EU institutions, including the European Commission and Parliament. 

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German ‘Mittelstand’ expects the crisis to deepen in 2025

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According to a survey conducted by the German Mittelstand Business Association (BVMW), eight out of ten Mittelstand companies anticipate a rapid contraction of the German economy in 2025.

The Mittelstand refers to traditional German companies, many of which dominate up to 90% of the export market. These firms cannot be classified as classic SMEs (small and medium-sized enterprises). Companies within the Mittelstand category form the backbone of the German economy, particularly in terms of employment.

As reported in WELT, 58% of the surveyed companies expect an economic downturn. One in five companies is already preparing for a crisis within the next twelve months.

The survey also revealed that 40% of Mittelstand companies experienced a decline in turnover over the past year. Another 40% of respondents indicated plans to reduce investments in the coming year compared to the previous year.

Beyond the general economic outlook, Mittelstand companies are particularly concerned about the shortage of skilled labor: 62% fear they will be unable to fill vacant training positions in the upcoming year.

Christoph Ahlhaus, Federal Managing Director of the BVMW, stated: “Not only our economy but also confidence in the recovery has been shaken by the political upheavals of recent years. Anyone assuming political responsibility in Germany must clearly articulate how our economy can move forward again.”

Hans-Jürgen Völz, Chief Economist at the BVMW, emphasized the importance of implementing reform policies in areas such as red tape reduction, energy costs, the labor market, and social policy. These measures are crucial to restoring hope and encouraging companies to invest in Germany.

Völz added, “It is essential to focus on the 3.5 million Mittelstand companies rather than large corporations and organizations that can relocate globally. Well-meaning speeches praising the Mittelstand on Sundays must be matched by concrete political actions in parliament from Monday to Friday.”

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Finland-Estonia power cable severed

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A submarine power cable connecting Finland and Estonia was damaged on Wednesday, Finnish Prime Minister Petteri Orpo announced. This marks the latest in a series of incidents involving submarine cables and energy pipelines in the Baltic Sea.

Arto Pahkin, operations manager for Finland’s electricity grid, informed public broadcaster Yle that the possibility of sabotage could not be excluded. However, Orpo assured that Finland’s electricity supply was unaffected by the blackout. “The authorities remain vigilant even at Christmas and are investigating the situation,” he wrote.

The energy operator Fingrid reported that the flow of electricity through the EstLink 2 cable, which transmits power to Estonia, was disrupted at 12:26 local time (13:26 TSI). This event follows a similar pattern of recent disruptions in the Baltic Sea.

Last month, two telecommunications cables linking Sweden and Denmark in the Baltic Sea were severed. Suspicion quickly fell on the Chinese ship Yi Peng 3, which monitoring websites indicated was near the cables at the time of the damage. Despite these suspicions, Sweden announced last Monday that Chinese authorities declined a request by Swedish prosecutors to investigate the vessel, which has since left the area.

Earlier incidents include the damage to the Arelion cable, running from the Swedish island of Gotland to Lithuania, on November 17, and the severing of the C-Lion 1 cable, which connects Helsinki to the German port of Rostock, on November 18 south of the Swedish island of Öland.

European authorities have suggested that these incidents may be acts of sabotage connected to the ongoing war in Ukraine. However, the Kremlin has dismissed these allegations, labeling them as “absurd” and “ridiculous.”

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