Good morning.

French President Emmanuel Macron’s swift repudiation of Der Spiegel’s leaked-call claims is more than reputational tidying; it is a stress-test of the West’s ability to keep a single diplomatic front as Washington and Moscow grope toward a cease-fire. Speaking in China, Macron insisted that “unity between Americans and Europeans on the Ukrainian issue is essential,” even as EU leaders scramble to plug a €90 billion gap in Kyiv’s 2026-27 budget and debate seizing frozen Russian assets. (reuters.com)

The episode exposes a structural tension: Europe’s security still rides on U.S. guarantees while U.S. negotiators draft peace proposals without EU input. Leaked minutes, real or not, gain traction because the imbalance is real—Europe funds barely 20 % of total military aid and still lacks a credible “plan B” if U.S. resolve wobbles. Transatlantic unity, declared daily, is being measured hourly in artillery shells and bond spreads.

History warns that wars often end amid alliance fatigue; 1919’s punitive peace and 1973’s oil-crisis rifts both bred long after-shocks. Today, credible burden-sharing—financial and security—looks like the only inoculation against another fracture. As Anne-Marie Slaughter reminds us, “Alliances fail not when interests diverge, but when responsibilities do.”

— The Gist AI Editor

Washington’s Strategic Shift

A new U.S. annual strategy document signals a striking pivot in foreign policy, directing harsh criticism not at traditional adversaries, but at its own NATO allies (WSJ). This move reframes transatlantic relations, suggesting a departure from decades of security consensus. For global markets and multinational corporations, this introduces significant political risk, as the foundational stability of the Western alliance is being publicly questioned. This policy shift could force a strategic reassessment in European capitals, potentially leading to increased defense spending and a more independent EU security posture.

China’s Export Juggernaut

Beijing is pursuing an aggressive “beggar-thy-neighbor” economic strategy, expanding its share of the global manufacturing market at the expense of other nations (WSJ). By leveraging state subsidies and controlled currency, China is creating overcapacity in key sectors like steel and solar panels, driving down global prices. This state-led model distorts international markets and undermines free competition, posing a direct challenge to economies that abide by market principles. The long-term effect could be a hollowing-out of industrial bases in competitor countries and increased trade friction.

American Economic Discontent

Despite data showing rising wealth, a significant portion of Americans report feeling poorer (FT). The paradox is explained by the rising costs of essential, non-tradable services like healthcare and education, which are consuming a larger share of household budgets. While nominal wages may be up, the purchasing power for these critical services has declined. This disconnect between headline economic figures and lived experience is a crucial social current, fueling political polarization and skepticism toward official economic narratives. It highlights how inflation in key sectors can erode the sense of well-being even in a growing economy.

U.S. Administrative Turmoil

In a reflection of ongoing bureaucratic battles, the Trump administration has ordered 260 federal employees from the Department of Education to return to work on Dec. 15, months after attempting to fire them (Bloomberg). The reversal, pending a court case, underscores the institutional friction and challenges in implementing sweeping administrative changes. From a limited government perspective, while streamlining bureaucracy is a valid goal, such chaotic implementation disrupts governance and creates uncertainty within federal agencies, potentially hindering their core functions.

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

U.S. Flips History by Casting Europe—Not Russia—as Villain in New Security Policy
— Wall Street Journal

China’s Growth Is Coming at the Rest of the World’s Expense
— Wall Street Journal

What the NYPD Needs From Mayor Mamdani
— Wall Street Journal

Russian Billionaire Must Pay Up in VC Fund Dispute, Judge Rules
— Bloomberg

Trump Education Department Calls Back 260 Staff It Tried to Fire
— Bloomberg

Video Doesn’t Change Story Much: Pletka on Boat Strike
— Bloomberg

Berlin’s Balance Sheet

The city-state of Berlin is grappling with a record debt of nearly €76 billion, forcing a stark re-evaluation of its long-celebrated “poor but sexy” model. Decades of high public spending, coupled with a tourism sector still trailing pre-pandemic levels, have exposed a fragile economic foundation. While political post-mortems over past energy deals like Nord Stream 2 continue—with key officials now admitting the project was a “mistake”—the city’s fiscal crisis is a more immediate threat to its viability. This situation serves as a cautionary tale for other European capitals where cultural appeal has often substituted for a competitive industrial base. The bill for prioritizing ideology over economic sustainability is coming due.

The Menopause Economy

A significant, under-the-radar drag on Europe’s labor market is coming into focus: menopause. New research shows the transition leads to a substantial decline in women’s employment probability and an increased uptake of social security benefits (CEPR). The economic costs are not theoretical; they represent a tangible loss of experienced workers from the labor force. The study highlights that hormone replacement therapy can mitigate these effects, yet access remains unequal. For a continent fixated on demographic challenges and strained welfare systems, ignoring the economic impact of menopause is a critical policy failure. Addressing it requires less bureaucracy in healthcare and a greater focus on individual well-being as a driver of economic output.

The Southern Energy Corridor

While Germany debates past energy policy failures, Spain and Morocco are forging a new path. For the first time, the two nations have established a “bidirectional trade of electricity and gas”, according to Morocco’s Energy Minister (El Pais). This pragmatic, market-driven energy link diversifies supply for Europe and opens investment channels for Spanish firms in North Africa’s burgeoning renewables sector. In parallel, Washington has approved a potential $301 million sale of advanced air-to-ground missiles to Italy, bolstering a key NATO ally’s defensive capabilities (Ansa). These developments underscore a dual reality: Europe’s security increasingly relies on agile, bilateral cooperation—both in energy and defense—rather than monolithic, top-down directives.

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

Schwesig als letzte Zeugin: Engagement für Pipeline “Fehler”
— ZDF

Is Berlin still sexy or just poor?
— El Pais

After ‘the change’: How menopause affects women’s labour and health outcomes
— CEPR

Gose und Elendt schwimmen bei Kurzbahn-EM zu Gold
— ZDF

Armbruster um Wimpernschlag geschlagen
— ZDF

Leila Benali, ministra de Energía de Marruecos: “Por primera vez en la historia, tenemos un comercio bidireccional de electricidad y gas con España”
— El Pais