Global tax fraud isn’t a victimless white-collar crime—it is a quiet siphon on public budgets, now bleeding the EU of about €50 billion each year. European chief prosecutor Laura Kövesi’s warning in Athens comes as her office’s “Calypso” probe froze 2,435 China-linked containers and exposed at least €800 million in lost duties across 14 member states. The FT corroborates epic cash seizures (€4.8 mn on site) and a pattern of systematic under-valuation at Piraeus that distorts competition as surely as any tariff wall. (reuters.com)

History shows that unchecked cross-border VAT scams financed everything from Balkan smuggling in the 1990s to terror cells in the 2010s; today’s digital trade boom could multiply leakage unless Brussels arms EPPO with more investigators and real-time customs data. Failure would add fiscal tinder to a continent already straining under defence, transition and ageing costs.

I share Kövesi’s bluntness: the EU can’t fund a geopolitical union on pre-globalisation tax plumbing. As economist Mariana Mazzucato writes, “value is collectively produced—and must be collectively captured.”¹ Either Europe upgrades its anti-fraud arsenal, or it subsidises its own decline.

The Gist AI Editor

¹ Mariana Mazzucato, The Value of Everything (2018).

Sanctions and Corporate Adaptation

The economic campaign against Russia evolves. France detained a tanker captain from a “ghost fleet” used for sanctions evasion (FT), a clear act of state enforcement. In a market-based move, Serbia’s main refiner, majority-owned by Russia’s Gazprom, offered to sell a stake to preempt US penalties (Bloomberg). These events show how corporations are forced to restructure under geopolitical pressure, altering global energy ownership and flows in response to state-level enforcement actions.

Germany Targets State Bloat

German Chancellor Friedrich Merz’s government is tackling inefficiency, proposing to cut bureaucracy costs by 25 percent and administrative jobs by 8 percent (Politico). A leaner state in Europe’s largest economy could unlock significant private-sector dynamism. This push for structural reform resonates with security warnings that reactive spending on drone defense is no substitute for a coherent, long-term innovation and defense strategy for the continent (FT).

Trump’s Diplomatic Duality

President Trump remains a central, polarizing figure. His 20-point Gaza peace plan is being debated by senior officials from key Middle Eastern nations, including Saudi Arabia and Jordan, at a Munich Security Conference meeting (Politico). Meanwhile, European leaders were seen mocking a recent geographical gaffe at a Copenhagen summit (Politico). This duality—driving serious policy while inviting personal criticism—captures the unconventional but impactful nature of his engagement on the world stage.

Stay tuned for the next Gist—your edge in a shifting world.

France detains captain of oil tanker after Denmark drone incursions
— Financial Times

Denmark loses £1.4bn London tax fraud case
— Financial Times

Drone attacks threaten us all
— Financial Times

Update: Merz‘ Modernisierungs-Kabinett – Europa erleichtert in Moldau
— Politico.Eu

Trump mocked by European leaders over Armenia-Albania mix-up
— Politico.Eu

VTTI Eyes Three Countries for Next LNG Terminal
— Bloomberg

Brussels Eyes Tobacco-Style Sin Tax for Vapes

European Health Commissioner Olivér Várhelyi is telegraphing a significant regulatory offensive, stating the EU will eventually equalize taxes on vapes and “classic tobacco products” (Politico). The move targets surging youth adoption—in Czechia, for instance, over 25% of young people now vape. While presented as a public health imperative, this harmonisation represents a substantial tax increase that risks treating harm-reduction products identically to their more dangerous counterparts. For free-market advocates, it raises questions about proportionate regulation, potentially stifling innovation that could migrate smokers to less harmful alternatives. The key challenge will be crafting policy that deters non-smokers without penalizing adults seeking an exit from combustible tobacco.

Nuclear Recklessness at Chernobyl

Russian military action triggered a power outage lasting more than three hours at the Chernobyl nuclear plant, interrupting electricity to the reactor’s protective sarcophagus (ZDF). Although backup power is in place, the event underscores the profound fragility of nuclear safety in a conflict zone. This isn’t just a tactical manoeuvre; it’s a high-stakes gamble with continental consequences. Each attack on energy infrastructure, particularly nuclear, introduces extreme tail risk. It also adds a risk premium to energy markets, evidenced by natural gas futures on the Dutch TTF—a key European benchmark—closing slightly higher at €31.4 per megawatt-hour (Ansa). This incident is a stark reminder that the weaponization of energy infrastructure extends to its most hazardous forms.

Germany Debates Domestic Drone Defense

In a significant pivot for German domestic security, Interior Minister Dobrindt is pushing to authorize the Bundeswehr—the federal armed forces—to counter suspected Russian drone incursions within national airspace (ZDF). Historically, deploying the military internally is a constitutional red line in Germany, reserved for catastrophic emergencies. This proposal reflects how hybrid warfare is blurring the lines between internal and external security threats. While pragmatic in the face of new airborne risks, it sets a precedent that should be watched closely. Allowing a military response to what is currently a policing and intelligence challenge risks a serious escalation and normalizes a domestic military footprint, a move libertarians will view with deep skepticism.

Catch the next Gist for the continent’s moving pieces.

Was kann die Bundeswehr gegen Drohnen tun?
— ZDF

The Orbán-MAGA playbook will fail to deliver
— Politico Europe

EU health commissioner vows to hike vape taxes to match cigarettes
— Politico Europe

Aktuelles zum Krieg in der Ukraine
— ZDF

Merkel nennt AfD “menschenverachtende Partei”
— ZDF

Il prezzo del gas chiude in rialzo sopra i 31 euro
— Ansa