German Chancellor Friedrich Merz has this week changed his tone and message on Israel and its war in Gaza. France and the UK threatened action last week, not that their words have saved any lives yet. There are still daily reports of children dying because of both bombing and starvation, while Israel has announced a military campaign aiming to take over two-thirds of Gaza and force its inhabitants into small zones.

Israel’s security is considered part of Germany’s Staatsräson. This is an inalienable policy goal for the country, but that does not mean that all behaviour is justified. The German government is now warning that Israel is crossing a red line.

On Monday Merz questioned Israel’s goal in Gaza, saying the current level of attacks can no longer be justified by the country’s fight against Hamas. He said that Germany has a clear position: no expulsions of Palestinians from Gaza, and an end to the starvation. Gaza and the West Bank belong to the Palestinians, on the path to a two-state solution, he added.

Later that day, Merz’s Foreign Minister Johann Wadepuhl condemned the offensive. But he also made it clear that Germany will continue to deliver arms and stand by the EU association agreement with Israel. As friends, we must be able to criticise when Israel’s operation is becoming intolerable, he said. Wadepuhl also repeated Merz’s insistence that there must be no expulsion or starvation of inhabitants.

Is the debate in Germany shifting? Felix Klein, the German government’s antisemitism commissioner, recently called for a more honest debate on the country’s stance towards Israel given its actions in Gaza. In his view, starving Palestinians and deliberately worsening the humanitarian situation have nothing to do with securing Israel’s right to exist. On the contrary, such actions may increase the risks to its own security in the future.

Protests against the war are spreading across Europe. At the start of this week, there were protests planned in 13 European cities organised by Jewish citizens against arming Israel and in opposition to the EU association agreement. An EU staff for peace initiative also collected 2000 signatures from officials and published a letter calling for concrete actions to address the worsening humanitarian situation in Gaza.

No one really expects the EU to exclude Israel from the association agreements at this time. An across-the-board exclusion would require a consensus of all 27 EU countries. Out of 27 EU member states, 17 backed looking into the matter.

But even if an outright exclusion is unlikely, the expulsion or suspension of Israel from particular projects, such as the Horizon research programme, has a lower majority threshold and is thus a real possibility. The council of the Israel Academy of Sciences and the Humanities warned on Sunday of far-reaching, serious consequences for research but also for society in Israel if the country were excluded from Horizon, the world’s largest and most prestigious programme for science and industrial cooperation.

Israel is considered a world leader in terms of how many R&D grants have been awarded to its recipients, receiving more than a billion in grants since it joined 1996. The Iron Dome, for example, is based on science that has been financed by the Horizon programmes. If these research grants and programmes become unavailable, it would shrink Israel’s capacity for research and accelerate the country’s brain drain.

There is a real political risk, though. Benjamin Netanyahu’s government may see Europe’s repositioning as a confirmation that Israel is on its own, and so may continue the military operation in Gaza regardless. Israel’s Strategic Affairs Minister Ron Dermer has already threatened that Israel may seize parts of the occupied West Bank if France and the UK recognise a Palestinian state. Any criticism of Israel’s strategy is quickly framed as support for Hamas by those defending the latest operation.

It is a polarised debate from which Europe is belatedly trying to extract itself with great pain. Now, all eyes are on the US and what it can achieve in ceasefire talks.

This is an edited version of an article originally published in the Eurointelligence newsletter. 

China is trying to catch up with America on artificial intelligence. The Wall Street Journal has reported that Zhipu AI — one of China’s six “AI tiger” LLMs — has released a new model that can rival leading US systems, including Anthropic’s Mythos, in cybersecurity tasks such as pinpointing security bugs. While this marks a milestone in China’s drive to catch up with Western AI capabilities, strong performance on a single benchmark does not mean it has taken the lead. Chinese models still lag behind their Western counterparts in broader capabilities, such as autonomous operation. Skepticism is therefore warranted before resorting to hysterical conclusions, but complacency about the geopolitical implications of China’s AI advances would be an even greater mistake.

On the infrastructure side, Chinese AI is still constrained by access to advanced chips, with American labs way ahead in computing capacity as well as investment. Analysis from earlier this year suggests that Chinese models are likely to be at least a few months behind those in the US. But they are still continuing to make progress, or that the geopolitical importance of AI will be decided only by whose LLM has ventured deeper into the technological frontier. The practical applications of AI, countries’ to capture foreign markets, and the application of AI into the real economy will matter just as much.

Here, China may hold an advantage. As with its dominance across many critical supply chains, Beijing may not need to produce the most advanced AI systems — only those that are affordable and widely deployable. In doing so, it could consolidate global influence by supplying functional, low-cost AI at scale.

Beijing seems to be pursuing exactly that path, developing an AI “open-source” strategy that offers affordable, widely available AI models for companies and individuals to use and modify as they wish. The production of the DeepSeek AI model, which matched the performance of Silicon Valley tools such as ChatGPT at a fraction of the cost for users, created goodwill among Chinese models with developers.

The four most popular models on OpenRouter, an AI hardware platform for developers, are now all Chinese. The goal for China is not only to win the frontier-model race, but to make its systems the default layer of AI adoption across industries and global markets. For most economies, the choice is increasingly between an affordable tool they can deploy now and a more robust one that may be out of reach.

And while the countries adopting Chinese models may be exposed to political pressure and cyber threats from Beijing, safer and more capable alternatives matter little if they are unaffordable. American AI companies are already under pressure to monetize products whose operating costs are rising. If Chinese open-source models become the cheap default for startups, universities, governments and businesses across the developing world, then America’s AI lead will be eroded from below.

Perhaps more concerning for America in the long run is how AI can give Chinese manufacturing even more strength, through the ongoing integration of AI as a general-purpose technology. China’s new Five-Year Plan mentioned AI more than 50 times and includes an “AI+” action plan aimed at spreading AI across the economy.

Beijing has been pioneering automation of its critical infrastructure for years, with promising recent results in increasing warplane production capacity. In that regard, China’s open-model strategy and manufacturing dominance will reinforce each other. Cheap, adaptable models accelerate deployment across the real economy while those deployments generate real-world data and use cases that can feed back into further model improvement.

The United States should not dismiss the importance of its lead in the AI race. That lead worries Beijing, not least because a more automated Chinese economy would also become more vulnerable to AI-generated cyber threats. But nor should Washington assume that China cannot catch up with American capabilities over time.

This AI competition represents part of a broader struggle over tech supply chains and geopolitical influence. Decisions over whether to adopt US or Chinese models could produce a more fragmented global reality, with different regions relying on different cloud providers, chips and security structures. The result will likely be a global economy which is divided into competing spheres, rather than one which produces a single winner.

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Miquel Vila is a political and geopolitical risk consultant focusing on industrial strategy, critical infrastructure and global supply chains.

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