In Geopolitics Today: Tuesday, March 5th
EU Launches €1.5B Plan to Boost Joint Defence Procurement, Turkish Oil Terminal Halts Russian Imports Under US Pressure, and other stories.
EU Launches €1.5B Plan to Boost Joint Defence Procurement
Top European Union officials unveiled sweeping proposals to strengthen the bloc's defence industry. The European Commission plans to allocate 1.5 billion euros ($1.63 billion) between 2025-2027 to incentivize collaborative purchases from EU companies and expand industrial capacity and innovation. The funds aim to address fragmentation along national lines that has limited economies of scale and competition. The proposals also call for the EU to procure at least 40% of defence equipment jointly and spend at least 50% of defence budgets within the bloc by 2030.
The EU wants to bind Ukraine closely into the new framework, and is exploring using frozen Russian assets to support Ukraine's defence sector. The defence industrial strategy, while modest in scale, represents a significant step towards building a more integrated and competitive European defence-industrial base to arm Ukraine. However, the proposals face hurdles to implementation, as member states jealously guard their national prerogatives on defence policy and spending. Reaching consensus on controversial ideas like a larger EU defence fund or coordinated arms sales will be challenging.
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Maldives Pivots to China With Defence Pact
The Maldives has signed a military assistance agreement with China, further strengthening defence ties with Beijing, while ordering the withdrawal of Indian troops stationed in the strategically located island nation by May 10. The deal comes as relations between Male and New Delhi have chilled since the election of President Mohamed Muizzu last September. Muizzu, who visited Beijing in January and elevated bilateral ties to a “comprehensive strategic cooperative partnership,” has been shifting the Maldives away from India's orbit and into China's.
The Maldives' military pact with China and ejection of Indian forces marks a significant geopolitical realignment in the Indian Ocean, where Beijing's growing presence and influence has stoked concern in New Delhi. While details of the new Sino-Maldivian defence agreement remain unclear, it could potentially involve Chinese assistance with training, surveillance, policing, and even military port access — all highly sensitive issues for India. New Delhi, which considers the Maldives and the broader Indian Ocean region as its strategic backyard, is likely to respond by bolstering its own naval posture. India has already announced plans for a new base on the Lakshadweep islands just 130 km north of the Maldives to increase “operational surveillance.” More broadly, the developments underscore how small states like the Maldives, perched along vital maritime trade routes, are becoming a key battleground for influence between India and China.
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China Bets Big on Green Hydrogen
China is moving swiftly to establish itself as a global leader in green hydrogen, leveraging its vast renewable energy capacity and domestic pipeline network to get ahead of rivals. Oil giant Sinopec is investing heavily, with a 20.5 billion yuan ($2.9 billion) project approved in January to produce 100,000 tonnes annually in Inner Mongolia using on-site solar and wind power, and supply Beijing by June 2027. This builds on Sinopec's growing green hydrogen footprint, including a 30,000-tonne plant in Ordos and a 20,000-tonne facility in Xinjiang.
China's green hydrogen push reflects a strategic bet on the fuel's potential to decarbonize industry and transport. The central government is targeting up to 200,000 tonnes of annual production by 2025, while local authorities have even more ambitious plans totalling around 2 million tonnes. Beijing sees cheap domestic green hydrogen as a key future competitive advantage. But it also positions green hydrogen as a solution to current challenges like wasted renewable power generation in remote regions. While Europe also aims to scale up to 10 million tonnes by 2030, its green energy infrastructure development is facing challenges.
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Turkish Oil Terminal Halts Russian Imports Under US Pressure
The operator of the Dortyol oil terminal on Turkey's Mediterranean coast, Global Terminal Services (GTS), has announced it will stop accepting Russian-origin oil to avoid potential sanctions exposure. The decision comes as Turkey faces growing US pressure over its economic ties with Moscow. In December, Washington threatened secondary sanctions on financial institutions facilitating Russian trade, chilling Turkish-Russian commerce and disrupting some oil payments.
GTS's move reflects the deterrent power of US secondary sanctions, which are forcing Turkish companies to curtail lucrative Russian trade even in the absence of direct prohibitions. It marks a blow to Moscow's efforts to redirect energy exports to friendly states to circumvent Western restrictions. With other Turkish terminals likely to follow suit, Russia may increasingly struggle to find outlets for its discounted oil as more third-country buyers bow to US pressure. The question is whether President Erdoğan will spend political capital to try to maintain Russian flows in the face of mounting sanctions risks, or acquiesce to Washington's demands to further isolate the Russian economy.
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Egypt Faces Gaza Crisis as Israel Threatens Rafah Invasion
As Israel threatens to invade the Gaza-Egypt border city of Rafah, Egypt faces an acute crisis with major stakes for its own stability and regional standing. A massive influx of Palestinian refugees into the Sinai Peninsula risks enabling armed resistance against Israel from Egyptian territory, a scenario Cairo is desperate to avoid. Egypt also wants to prevent perceptions that it is facilitating a “Nakba 2.0” in exchange for US aid.
Egypt's role mediating ceasefires and aid delivery has made it an indispensable partner for the US, which has toned down criticism of President el-Sisi. But while Washington opposes a forced mass transfer of Palestinians into Egypt, it has not applied serious pressure on Israel to change course, to Cairo's frustration. Egypt has refrained from officially joining the US-led Operation Prosperity Guardian, despite the economic pain caused by Houthi attacks on Red Sea shipping. While US-Egypt ties remain close, Cairo is cautiously managing the relationship given Washington's role in support of Israel and growing isolation in the Arab-Islamic world.
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Drones Reshape Ukraine Battlefield Tactics
The widespread use of drones by both Russia and Ukraine has transformed the tactical battlefield, but has not fundamentally altered the character of the war or proven decisive. Medium-altitude long-endurance drones have largely disappeared in the face of formidable air defences. Instead, the primary impact has come from large numbers of smaller, cheaper drones down to the platoon level. These have made it extremely difficult for forces to mass or manoeuvre without being detected, and enable highly lethal artillery strikes.
The drone war in Ukraine centres primarily on human operators, often working in teams with different drones performing detection and strike functions in combination with artillery. This disaggregated model creates a resilient, adaptable kill chain that is more than the sum of its parts. While individually impressive, these developments appear more evolutionary than revolutionary given the continued centrality of artillery, the rapid diffusion of drone technology to both sides, and the lack of true autonomy or swarming behaviour. Fully autonomous drones, if developed, could prove more disruptive. But for now, the key lesson is the tremendous tactical advantages drones provide to small units in terms of situational awareness and precision fires, making the battlefield more transparent and lethal.