Predictions and Reckonings: From 2025 to 2026

Hello and welcome to the world in 30 minutes, the podcast on the events, policies and ideas that will shape the world from the European Council on Foreign Relations. My name is Mark Leonard, I'm Director of ECFR and this week we're going to join you for my very favorite podcast of the year, one where we don't just talk about the events, policies and ideas that shape the world in general, but about the future of 2026 and also what happened in 2025 and it's one of the most popular podcasts we do every year and it's always very exciting to get back together with Jeremy Shapiro as the year ends to mark ourselves and look at how we did for the year before but also to get out our crystal balls and gaze into the future. So Jeremy, lovely to see you again, looking very fancy in your end of year haircut, every December whether I needed another. We should probably start by going back over our predictions for 2025, it was a pretty momentous year, I guess we have to. So this year we have taken quite a big bold step actually which we should be transparent with our listeners for because normally we mark our own predictions for the year ahead which has resulted in some quite good schools, typically I think at least seven and a half on the year. But this year, Jeremy Unilaterally decided to get a third party to give a kind of what's the word, a sort of veneer, a patina of independence to the outcomes that we have. Yeah, I think we're looking for the most objectivity you can find from someone who actually works for you. And the results have been less good as a result of this, so I'm not sure we should continue with this. All right, so Jeremy, why don't we go back through last year then and look at our 10 predictions and see what we've got and then you can do your big reveal what our ultimate school was for 2025. Okay, our first prediction was that it's Trump's world, we only live in it which meant that governments outside of Europe and a few inside would spend either the year either welcoming or pretending to welcome Donald Trump's return to power and that he would basically inject chaos into everything that I guess felt like a pretty safe prediction certainly turned out to be true, so we got a full point for that. So the second one, we said that the German grand coalition strikes back and we argued that the federal election results would result yet another version of the grand coalition between the CDU, CSU and the SPD coming to power. We then said that to the disappoint of many Europeans, the recycle coalition wouldn't introduce any major changes in German, these foreign security or economic policy, whether on electric vehicles, military support for Ukraine or defense spending, and our tough colleague has only given us half a point for that presumably because we were right about the grand coalition, but there was this change to the German constitution and the debt break which is opening the door for Germany to eventually spend as much as three times what the French and the Brits are spending on defense, which I suppose would constitute a major change. So I think we should have got 17, at least 0.75 for that one, but anyway, I think it would be hard to argue that there weren't major changes in German policy. That is true. The third prediction was that the Trump chaos machine would mask the erosion of US democracy and this definitely turned out to be true, though as a substantial recession in US democratic norms over the course of the year, but it wasn't the main conversation, it was certainly part of the conversation, but the people were more focused on the Trumpian scandal of the day or the Trumpian policy maneuver of the day, bombing of Venezuela or something and not on the idea that actually democratic norms were being eroded. So we got a full point for that one for sure. So our fourth prediction was of quasi-peace in Ukraine. We said that the war would reach a ceasefire or at least a quiescent that's broadly favourable to Russia, but also palatable to Ukraine. And it looks like we kind of shot a bit too early on that. It could very well be what happens in 2026. We got a new plan for that for prediction number four. How do we don't predict the number five? The number five was that Israel and Iran continue sparring, but don't stage a title match. We gave ourselves or our colleague gave us a half a point on that because of course they are continuing to spar and certainly the conflict isn't over, but arguably the 12-day war was a sort of title map, particularly because the US joined and finally gone the Iran nuclear programme, which is quite a development, not what we foresaw, but we were able to get from our tough colleague and half of what we've done now. Our seat prediction was a contained conflict between the US and China. So we predicted that the US would launch a trade war against China again, but by the years and negotiations to end it would be progressing and both sides would see this more as a conscious decoupling than a divorce. And we also predicted that the PRC, the People's Republic of China would not invade Taiwan. So for prediction number six, we're very happy to have got a full point. Prediction number seven, which was probably our most impressive prediction, was that there would be some sort of Turkish peace deal because of the new security that Erdogan felt and Turkey from his surprise victory in Syria and being fairly ascended domestically and also in order to help his election chances in the coming elections. And within broad terms does seem to have happened. There was a tremendous advance in Turkish talks over the course of the year and talk with the PKK disarming. So we got a full point on that as well. So the eighth prediction is one that I really not sure we should buy into the way we've been marked on this, but there's obviously no one can appeal to one of them to ourselves. But our prediction was a European muskrat. So we said that the world's richest scadfly Elon Musk would interfere in multiple European elections and make a general pest of himself to the extent that the European Commission would launch a slew of investigations into his business interests. And we said that by the end of the year, there'd be policy changes being called for on his platform X. And anyway, we get a half a point for that because he definitely has made himself into a real pest in lots of different European countries. And there was an investigation in term, and he even got fined. So how come we only got half a point? Because he didn't really interfere in any European elections. Well, he sort of did, though, he spoke rally for Alice Videl in the German elections. And he's kind of got involved in the British elections as well. Well, I mean, unfortunately, he's so extreme that he's not actually supporting candidates that are running for elections, more people like Tommy Robinson, who are like convicted felons who, you know, use violence rather than. Okay. Well, we'll put in a, we'll put in an appeal on that one. But I think for now, we're going to have to stick with our semi-objective graders' points, he's. Off a point. Yeah. We was robbed. This is a rigged game that we're in here. Our ninth prediction was that was clarity over the channel Europe United. The idea here was that driven by a mix of mutual insecurity and slow growth, the U.S., the UK and the EU would agree on a major reset in their relationship, much more than was expected. I think we got a half a point on this. There definitely was some advance, but it didn't seem to be a major reset. And it was mostly along the lines that people were predicting. It was a sort of baby steps toward getting somewhere, but it seemed as if on both sides they remained there was sufficient domestic political pressure to avoid any sort of major headlines of a reset. And our final tenth prediction was of a refugee non-crisis. We said that there'd be a surge of refugees from Ukraine, Syria and elsewhere flooding into Europe, dwarfing the number scene in 2015, but unlike that year, there wouldn't be a political crisis because governments would respond vigorously with immigration suppression policies that adopt or even copy the ideas of populist anti-immigration parties. And Chris has very kindly given us a full point for that. I'm not sure that we own the full point there, but it's definitely true that there've been a lot of refugees in Europe that the salient of the issues have risen massively and that mainstream parties have almost completely unanimously, apart from maybe Spain shifted towards adopting much tougher policies. So anyway, we got a point for that. So what does that mean? What's our total generally? Our total is 7 out of 10, which is a little bit less than previous years, but not that, but still I think, respectable, and particularly respectable because of the moderately more objective grading system we use this year. So anyway, I think we can say safely that our score for predictions was probably one of the best things that happened in 2025, which wasn't necessarily a great year for the world. Yeah, I think if the world was going as well as our prediction exercise, it would be in much better shape. So we now have to go once more into the breach and look at what's going to happen in 2026, and I think it's going to be a pretty, my prediction is it's going to be a pretty wild year where a lot of things happen. One of our friends and colleagues, Ivan Krustov said that at the beginning of 2025, it felt like we had changed from a normal train into a high speed train, and things were just happening very, very fast, but it wasn't very clear that the train was necessarily going anywhere. And I think that we will stay on that high street train in 2026. So let's go through some of the predictions that we're making for this year, and why don't I start, Jeremy, with European politics, and our prediction is that the European far right is going to make further inroads with the AFD winning and outright majority and at least one of the states that has elections next year. We think look on news government could very well collapse in France, and the Labour, the British Labour Party's poor performance in the May elections could create a big leadership crisis within the British government. Our second prediction is that the U.S. under Trump will make an ambitious deal with Iran that looks suspiciously like the Obama era, JCPOA joint comprehensive plan of action in that they'll trade a nuclear restraint for sanctions relief, but this time with more incentives for the U.S. to invest in Iran. And Trump will declare this massive victory and not really notice that it's exactly what he threw out in 2018. Our third prediction is that increased coercion from China and the U.S. is going to prompt a tech clash in Europe. We think that the European Commission is going to levy large fines on big American platforms, including X, and is going to take aim at other tech companies. And at the same time is likely to increasingly rely on cybersecurity regulations to push back against China potentially even using these tech norms to block Chinese electric vehicles and renewables exports to Europe. Our fourth prediction is that the U.S. will following up on the national security strategy finally publish its force posture review, which is the review that's supposed to talk about how U.S. forces are going to be deployed all over the world. And the force posture review will announce only modest troop withdrawals from Europe, but they'll also send a very song signal with the review that more will come if Europe doesn't take up the burdens increasingly of European defense. So our fifth prediction is about Ukraine and we are predicting an uneasy ceasefire between Ukraine and Russia. We think that the surprise maybe if some people is going to be driven by the Ukrainians with American backing or rather insistence, Europeans are not going to play a huge role in working out the contours of this ceasefire. And it will be followed by elections, which will see Zelensky replaced as president. Our sixth prediction is that in the 2026 U.S. midterm elections, the Democrats will take the House by hammering on relentlessly about affordability and pivoting in their economic policy rhetoric, at least toward a form of progressive economic nationalism. They fail to take the Senate, however, and so Trump announces that the Democratic control of the House isn't going to affect the way he governs in any way, which is mostly without Congress in any case. Our seventh prediction is about the UK and Europe again, and we predict that pressure will grow to fever pitch on Kirstalmer, the British Prime Minister, to join the customs union or A customs union, even as the official talks between the EU and UK go nowhere. Our eighth prediction is a sort of wobbly one. It's that AI will reshape state capacity more than labor markets. We mean by that is that as governments use AI for things like improving tax collection, improving surveillance, military logistics, and regulatory enforcement, it becomes apparent that the first major impact of AI is on state capacity rather than on labor markets or the economy more general, more generally. So we're predicting that AI will, in the first instance, enhance state capacity. Our ninth prediction is that the green deal will become the cocky deal. What we mean by that is that the green lash of 24 and 25 is going to coalesce into a new policy reality in 2026. European governments are going to talk much less about climate and much more about energy sovereignty. So decarbonisation will be an agenda when and only when it serves strategic, especially military purposes. If you want to, Jeremy, this is Jeremy's joke. If you want a solar panel with 2026, you better paint it with camouflage. Thanks for giving me credit on that. I'm not sure I wanted it, but I think it's all in the delivery, frankly. Anyway, our tenth prediction, maybe you should deliver it properly. No, let that one go. No one needs to hear that twice. Our tenth prediction, building on the fact that we predicted it last year, it was right, is that focused on its worsening and channel economic problems, China fails to invade or block aid Taiwan yet again. And this is, in some ways, prompted by some good words that Trump had to say about Taiwanese reunification over the course of 2026, in the service of getting a some sort of trade deal out of his summit with Xi this spring. Okay, so that's our ten official predictions, but because we're really kind people, every year we tend to serve up one or two bonus predictions. And this year is no exception. So our first bonus prediction is that the uneasy ceasefire in Gaza will hold just enough for the Israelis to claim that they've made peace. Saudi Arabia and Israel can as a result conclude an effective expansion of the Abraham records in which they gradually normalize relations with one another. And as part of the deal, Trump will provide Saudi Arabia with a similar security guarantee to the one that he gave to Qatar in 2025. Our second bonus prediction is that sovereign debt problems in the global south will deepen without producing a single debt crisis that dominates the headlines. So things like default restructuring and rollovers will continue, but in a fragmented country by country manner that avoid systemic shock. At the same time, it may well be true that these sovereign debt crisis will produce more suffering in the various countries of the world than even some of these security crises that we've been talking about in the other predictions. So that is the end of our predictions for 2026 to be great to hear whether you think that we were right in our assessment of our performance in 2025 or rather whether Chris was right or whether he shouldn't fat to give us a couple of extra points because of our overlooked pressions. But also do let us know if you think that we missed out anything for for 2026 because we're always on the lookout for great predictions will read out some of the best messages that we get on the podcast. So you can have your 15 minutes of podcast fame as well. Please write to me at mark dot Leonard at e CFR dot EU. So we will be putting up a commentary version of this set of predictions that we just made on our website at e CFR dot EU. But we still got a bit of time on this podcast because we've only been going for about 20 minutes. We can have a mega bookshelf segment today and maybe even go beyond books and think about some of the things that we like the most in 2025 that we want to recommend to our listeners. Where do you want to go first Jeremy? What's on your bookshelf? Well, what I'm reading right now is a book called The Dream Factory London's First Playhouse and the Making of William Shakespeare by Daniel Swift. It's a strange sort of book. It is about how the very first theater in London, purpose built theater in London, which was built in about 1580, shaped William Shakespeare. And interestingly, this theater was called the theater and it's sort of the progenitor of the entire idea of a theater and then it talks about how the existence of the theater, the shape of the theater, the economics of the theater, the culture of the theater was so critical to Shakespeare's place. I'd like to recommend two things. One is a podcast which I've really been enjoying over the Christmas break. Adam Tuss, who's an e CFR board member, does a wonderful podcast with Cameron Abadi every week called One's and Tuss, which is really worth listening to anyway, but I particularly enjoyed a mini series they did on heterodox economists looking at some of the key figures behind the Soviet Union and their particularly wonderful episodes on Lenin and Trotsky and Jose Luxembourg. I believe there's going to be one on Stalin as well, but they're very, very thought-provoking at a time when there's a lot of revolutionary further in the air. And then the second thing I want to do is to recommend some books that you can't actually buy yet, but which you'll be able to buy very, very soon, particularly recommend coming out in January, a book by our colleague in Berlin, Yarna Poulieri, who has written, I think, what book we're going to be a must read book about European security. It's called Their Fatidict Auroba, who defends Europe, looking at the big geopolitical challenges that our continent faces. It's going to be published by Horvolt in German at the end of January, and so if you read German, I really, really do recommend it, and hopefully it might get translated into other languages as well, and we'll keep you posted on this podcast. And then at the issue of being accused of self-promotion and log-rolling, I think it will be rude for me not to say that I have a book myself, which is going to come out in 2026, but that will be a bit later in late April, and that is called Surviving Chaos Geopolitics When the Rules Fail. And one of my predictions for 2026 is that you'll hear a lot more about that on this podcast. I don't want to spoil it, but hopefully you'll be almost as excited as I am about this book coming out. It is an attempt to try and make sense of the crazy world that we're in at the moment, and to help people to think about how they can prepare for the chaos and the unorder, which is coming our way. So we'll come back to that, I think, many times over the next period of time. That sounds like the most solid prediction we've made in this entire podcast. Well, we can maybe get an extra bonus mark, Chris, if you're ranking us for the next. Anyway, thanks so much, Jeremy, for coming back and joining me again for this podcast. It's always a great fun to do, and hopefully of some use to our listeners who are looking out at a very uncertain global situation. We hope that you've had a restful holiday and that you're going to return renewed and refreshed for a year that is going to be full of chaos and drama, and hopefully a few good news stories as well. We'll put links up to all the publications we mentioned on our website at ecafr.eu. But for now, from Jeremy Shapiro and myself, Mark Leonard, it's goodbye. The research in this podcast is on on Sunda, the editor of this episode is Mary Ferris Arats, and the tough marker for the predictions for 2025 was Chris Herman.