Europe’s systemic challenge or why underestimating Russia and the axis of autocracies is a
mistake
Autocracy risk
Fecha: septiembre 2025
Guntram Wolff
SEFO, Spanish and International Economic & Financial Outlook, V. 14 N.º5 (September 2025)
Europe is facing the most profound systemic challenge since the end of the Cold War, as misconceptions about Russia’s economic weakness and the resilience of autocracies have obscured the scale of the threat. Measured in purchasing power parity, Russia’s economy is the largest in Europe, and its military spending—at nearly 7% of GDP and over a third of its federal budget— places it on par with Europe collectively. This concentration of resources, combined with hybrid warfare and sabotage operations, has enabled Russia to sustain its war in Ukraine despite sanctions. At the same time, China’s state-led growth model and technological advances add to the challenge, highlighting the ability of autocracies to mobilize resources for strategic aims. For Europe, incremental responses will not suffice. A bold strategy is needed, encompassing increased defence spending, investment in modern military technologies, and deeper cooperation through joint procurement and shared assets. The ultimate test for European democracies is to demonstrate their capacity to prioritize security and growth while maintaining cohesion in the face of an assertive axis of autocracies.