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May 2025
Dear Readers,
Germany’s new government under Chancellor Friedrich Merz is just three weeks in – and already it is facing its first stress test. With Russia intensifying its attacks against Ukraine and Trump escalating tariff threats, there is no doubt: there is no grace period for Berlin. Chancellor Merz has vowed to bring strategic clarity to Germany’s EU policy. Now comes the first opportunity to deliver – because without a decisive Berlin, Europe will struggle to respond effectively to Washington’s increasingly coercive trade environment.
We take the gravity of the profound global shifts seriously and are strengthening our Europe programme to meet the scale of the challenge. Today, I would like to introduce Lucas Guttenberg as the new Director of BSt Europe. He leads the team together with Malte Zabel, Co-Director since 2021. Lucas brings a combination of think tank skills and government know-how: Before joining us at BSt, he advised Vice-Chancellor and Economy Minister Robert Habeck on industrial and European policy and previously served as Deputy Director of the Jacques Delors Centre in Berlin. He began his career as an economist at the European Central Bank.
As we are reshaping our Europe work to meet the challenges our continent is facing, we launched a new website: it is our one-stop shop for everything Europe at Bertelsmann Stiftung. From innovation and investment to China, tech and resilience, you will find our latest studies, policy briefs, commentaries, and events along with our experts. I invite you to explore the full scope of our work!
With this new Europe newsletter, Lucas Guttenberg and I will keep you informed biweekly about the most pressing and strategic issues we are working on.
This week, I would like to highlight our work on boosting Europe’s competitiveness with the limited financial resources at hand. My colleague Lucas Carvalho makes proposals how the planned European Competitiveness Fund in the next EU Multiannual Financial Framework could look like. He explains how bundling existing EU programmes into a single fund could unlock more impact and lays out the design principles that should guide it. Additionally, we examine how Germany can step up to lead Europe’s preparedness agenda by adopting a whole-of-society approach to national security – a shift that is long overdue given current threats. We also explore how the EU might navigate a looming trade war with the United States, including options for burden-sharing among Member States.
We are also excited to share the 2025 Conclave Report, the result of our second high-level meeting with leading European thinkers. The conclave delivered a clear message: Europe should aim to realise its full potential, becoming more proactive, more resilient and more effective. This transformation depends on unity, strategic investment and a citizen-driven vision for the future.
Scroll down to explore more of our recent and upcoming activities.
Please be in touch with your comments, suggestions and questions.
Best wishes,
Daniela Schwarzer
Member of the Executive Board
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Policy Brief: Building a Smart European Competitiveness Fund
The Commission plans to merge much of the EU’s innovation funding into a single European Competitiveness Fund. This new policy brief sets out how to make it work: define a clear scope; structure funding around thematic pillars covering the entire innovation ecosystem; deploy the full financial toolbox; and combine clear, flexible governance.
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Germany and the Preparedness Paradigm
Germany should be encouraged to adopt a whole-of-society approach to national security to lead Europe's preparedness agenda. Despite strong civic potential and strategic frameworks, gaps remain in public engagement, institutional coordination, and shared risk culture. Integrating citizens, reforming structures, and enhancing cooperation are vital for shaping a resilient and defensible Europe.
Read more
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How to Survive a Trade War
EU exports to the US face rising tariff threats, with uneven impacts across member states. To maintain unity and fairness, the EU could consider designing a burden-sharing mechanism, drawing on past models like the Brexit fund. Coordinated support, regulatory flexibility, and risk mitigation are essential to navigate a prolonged trade conflict.
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Report: A Power Agenda for Europe
The 2025 Conclave recommends the EU to adopt a bold Power Agenda, focusing on defence autonomy, tech leadership, financial reform, and democratic renewal. Strategic partnerships, industrial innovation, citizen engagement, and robust funding are key to securing Europe’s global role in an era of geopolitical instability and growing international competition.
Read more
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Policy Brief: Cohesion Policy in National Envelopes
The EU plans to centralize Cohesion Policy through national envelopes, risking stakeholder exclusion. This brief explains how to preserve the partnership principle by establishing National Partnership Committees and strengthening the European Code of Conduct on Partnership. Effective inclusion of local actors is vital for democratic legitimacy, tailored policies, and better fund implementation.
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Mineral Resources and China
Europe faces critical mineral dependence on China, risking economic vulnerability. The EU’s Critical Raw Materials Act aims to diversify supply, boost domestic extraction, and strengthen recycling and reserves. However, without concrete funding, partnerships, and policy reforms, achieving resilience and reducing reliance on China by 2030 remains a major challenge.
Read more
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Liberal Democracies Under Pressure
The global influence of liberal democracies is declining. In Aus Politik und Zeitgeschichte, Daniela Schwarzer explores how authoritarian regimes challenge democracies—via disinformation, economic coercion, and undermining legitimacy. She outlines how Europe can respond and stresses the urgent need to boost democratic resilience.
Read the full article in German here.
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Stay tuned
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Thank you for reading this month’s BSt Europe newsletter! Your support is essential as we work to develop ideas to enhance Europe’s position on the global stage.
To keep abreast of our work, please keep an eye on our website: bst-europe.eu
Or follow us on social media: https://bsky.app/profile/bst-europe.bsky.social
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