As of November 15, 2025, Europe’s periphery leverages Russian energy ties and Chinese investments for economic lifelines, while core Western states battle sanction-induced energy inflation and deindustrialization. This divergence underscores EU fractures amid the Ukraine war.
Belarus & Hungary: The Russia-Friendly Lane
- Belarus secured U.S. sanctions relief on Belavia airline and Lukashenko’s jet in September, freeing 52 political prisoners (with 100+ total since). Minsk retains subsidized Russian gas (~$100/MWh) and serves as Moscow’s rear base for Ukraine operations.
- Hungary’s Gazprom contract delivers 4.5 bcm/year through 2036 at below-spot rates (€200-250/MWh), despite EU phase-outs by 2028.
- Budapest has blocked €6.5bn in EU Ukraine military aid since 2023 and opposed all Russian energy sanctions.
- It lured Chinese firms CATL (€7.3bn Debrecen plant) and EVE (€1.3bn with €37mn subsidies), cementing Hungary as Beijing’s EU EV hub.
Spain: The Chinese Factory Gambit
- BYD eyes Catalonia near Barcelona for its third EU plant, potentially €4-10bn investment producing 150,000-300,000 EVs/year by 2027 creating ~4,000 jobs.
- Madrid offers €450mn grants and subsidies prioritizing local assembly, helping BYD evade 10% EU tariffs on Chinese EVs while advancing Spain’s green shift.
Serbia: The Railway to Beijing
- The Serbian stretch of the €2.5bn Chinese-financed Belgrade-Budapest high-speed rail (Exim Bank loan) opened in October, cutting Belgrade-Subotica to 1.5 hours; full line operational by 2026.
- Serbia shuns Russian sanctions, hosts joint Chinese-Serbian police patrols/cooperation centers in Belgrade since 2019, and relies on Beijing for Brussels-unavailable funding.
Sidelining Poland and the Baltics: Alliance Strain
- Warsaw and Vilnius slammed the unconsulted U.S. Belarus thaw as a “sanctions gap” fueling hybrid threats like migration pushes and Zapad-2025 drills.
- U.S. military officers observed the Zapad-2025 joint Belarus-Russia war games (September 12-16), simulating NATO invasion with 10,000+ troops just days after NATO scrambled jets over Russian drones crossing into Poland on September 9-10, prompting the alliance’s first “Eastern Sentry” response.
- A follow-up incursion on September 20 kept allied aircraft airborne. Lithuania deems Minsk’s pivot “skeptical”; Poland decries ignored frontline realities, with potential loopholes like Russian airlines accessing Boeing parts via Belarus.
- Trump’s September 21 defense pledge “Yeah, I would” protect Poland and the Baltics—rings hollow amid eroding trust.
Western “liberal” cores like Germany face €40-50/MWh gas spikes and factory closures, their renewables lag exposing sanction costs whilst the periphery watches & hedges its bets.
