MONEY

Venezuela holds the world’s largest proven oil reserves—303 billion barrels, about 17% of the global total and more than Saudi Arabia’s 267 billion. Yet Venezuela produces fewer than 1 million barrels per day, less than 1% of global output. That’s less than a third of what it pumped in the late 1990s and early 2000s, when production topped 3.5 million barrels daily.

So what happened? It’s the result of political decisions, economic sanctions, and the sheer difficulty of extracting Venezuela’s heavy crude.

Proven Reserves, Unproven Output

Having oil reserves doesn’t mean you can easily produce it for the world’s markets. Most of Venezuela’s crude is extra-heavy oil, closer in consistency to asphalt than gasoline. To produce it at scale, companies need the following:

• Specialized drilling equipment
• Upgraders to turn thick crude into exportable oil
• Constant maintenance to keep wells from clogging
• Special chemicals (often imported) to thin the oil so it can flow

Thus, while Venezuela still has massive amounts of proven reserves, it lacks a functioning system to extract, process and ship it. Over the past two decades, that system has all but fallen apart, based on decisions inside and outside the country:

The Expertise Exodus

In 2002–2003, a strike at the state oil company PDVSA led to the firing of almost 20,000 workers, about 40% of its personnel. These were the engineers and managers who knew how to handle Venezuela’s notoriously difficult crude.

According to the U.S. Energy Information Administration, that purge, “combined with a reported tendency to hire based on government loyalty rather than technical skill, continues to affect operations, resulting in a lack of high-level expertise.”

The Sanctions Squeeze

U.S. restrictions on Venezuela began in 2005, when the U.S. State Department determined Venezuela was failing to cooperate on anti-drug and counterterrorism efforts. President Barack Obama imposed further sanctions in 2015, targeting officials said to be involved in human rights abuses, corruption, and undermining democratic institutions.

The sanctions with the biggest bite came in 2017, when President Donald Trump cut off the Venezuelan government and PDVSA from U.S. financial markets. The restrictions removed access to capital markets, scared away potential investors, and forced Venezuela to sell through “shadow fleets” to China at steep discounts.

A 2021 Government Accountability Office report found Venezuelan oil production had already declined 47% from 2010 levels before the 2019 sanctions, then dropped another 59% in the 18 months after. China now receives about 80% of Venezuela’s exports and has lent close to $50 billion over the past decade in exchange for crude deliveries.

Industry Nationalization

Starting in 2006, former Venezuelan President Hugo Chávez forced foreign operators into minority positions or seized assets outright. Exxon Mobil Corporation (XOM) and ConocoPhillips (COP) withdrew entirely in 2007.

Only Chevron Corporation (CVX) maintained significant operations, and today it accounts for about a quarter of Venezuelan production.

Infrastructure Decay

The above factors have led to a long-term decline in the quality of Venezuela’s pipelines, many of which are more than 50 years old. PDVSA has estimated that updating pipeline infrastructure alone would require $8 billion just to return to late-1990s production levels.

Its Paraguana Refining Center—one of the world’s largest—was running at just 10% of its 940,000-barrel-per-day capacity as of late 2023. Overall, Venezuela’s refineries are functioning at about one-fifth of their capacity.

What Rebuilding Venezuela’s Oil Infrastructure Would Take

The future of Venezuela’s oil industry depends on political developments. After the U.S. military captured President Nicolás Maduro on Jan. 3, President Trump announced that the U.S. would “run” Venezuela and that American oil companies would “spend billions of dollars” to rebuild the country’s energy infrastructure. But it’s unclear what that means in practice or whether Venezuela’s current government will cooperate. Vice President Delcy Rodríguez, whom Venezuela’s high court named interim president, has publicly rejected U.S. control, declaring: “We will never again be slaves… we will never again be a colony of any empire.”

Given that uncertainty, analysts see a range of scenarios:

With a stable government and lifting of sanctions: This would mean that foreign companies would be far more willing to invest. JPMorgan analysts estimate Venezuela could boost production to 1.3 billion–1.4 million barrels per day within two years, a 50% increase from today. Over a decade, output could reach 2.5 million barrels per day, far more than 2025 levels. Columbia University’s Center on Global Energy Policy notes that international operators already in the country—Chevron, Italy’s Eni, and Spain’s Repsol—could ramp up production relatively quickly since they’re operating well below capacity.

If things in Venezuela remain tumultuous: A U.S.-led transition could make things worse in the short-to-medium term. JPMorgan analysts warn that political turmoil could temporarily cut production by half, given potential disruptions at PDVSA facilities.

The Bottom Line

No matter what happens politically, RBC Capital Markets and others argue there’s no easy path to returning Venezuelan production to the 1990 level of 3 million barrels a day. Even under the most optimistic scenarios, according to the Center on Global Energy Policy, a daily boost in oil production of 500,000 to 1 million barrels is the most plausible over the next couple of years. Returning to 1990 levels would take another seven to 10 years.

Oil industry mismanagement, old infrastructure, crippling U.S. sanctions and difficult geology have throttled Venezuela’s oil output, which often must be sent through back channels at discounted prices to reach the world market.

Even in the most optimistic scenario—with political stability, sanctions relief, and tens of billions in new investment—a return to 3 million barrels per day would add only about 2% to global oil supply.

Published on
05/01/2026 – 17:33 GMT+1

It’s another crucial week for the contentious Mercosur deal. European Union agriculture ministers will meet on Wednesday for key political talks that could lead to a vote on the agreement on Friday.

An EU diplomat told Euronews that the meeting, which is being organised by the European Commission, will be attended by EU Trade Commissioner Maroš Šefčovič, Agriculture Commissioner Christophe Hansen, and Commissioner for Health and Animal Welfare Olivér Várhelyi.

Together, they are expected to give “clarifications” on the continued support for farmers’ income in the next budget of the Common Agricultural Policy.

The deal, which aims to create a free-trade area with Argentina, Brazil, Paraguay and Uruguay, was at the centre of heated discussions at December’s EU summit.

Its supporters – lead by Germany and Spain – have been pushing for a quick endorsement in order to access new markets at a time of geoeconomic tensions, while Italy and France succeeded in postponing a crucial vote in order to protect their farmers, who fear they will be unable to compete with imports coming from Latin America.

Depending on the outcome of this week’s talks, the EU farm ministers’ meeting could open the door to a vote on the Mercosur agreement on Friday. To be implemented, the deal needs the backing of a qualified majority of EU member states.

Decision day looms again

Among the items on Wednesday’s agenda will be limits on pesticides that can be contained in products imported into the EU, with France demanding that the deal include reciprocity in production standards.

France has been facing an agricultural crisis for several weeks, with farmers protesting against both the Mercosur agreement and the government’s handling of lumpy skin disease, a contagious virus affecting cattle.

In a letter sent on Sunday, French Prime Minister Sébastien Lecornu called on the EU to tighten border controls on products that do not respect EU sanitary and phytosanitary standards.

The French government also announced it would issue an order to suspend imports from Latin America containing residues of pesticides banned in the EU.

That measure, however, would require clearance from the European Commission. Pressure from Paris has already led the Commission to propose a safeguard to strengthen the monitoring of the European market to avoid unexpected disruptions.

That legislation was the subject of a deal between the European Parliament and the EU Council, and is expected to be endorsed by the 27 member states on Friday during a meeting of EU ambassadors.

In Caracas, in early January, explosions are a common sound in the morning hours. To be honest, it’s not unusual for some irresponsible person, after a few too many drinks, to decide to disrupt the sleep of the entire neighborhood by launching firecrackers or fireworks. We’re quite used to it. That distinctive whistling sound, a couple of seconds of silence, and an explosion that makes dogs bark and babies cry.

That’s why, perhaps, the explosions that sounded shortly before 2:00 a.m. in the early morning of January 3, 2026, didn’t seem strange, until they were accompanied by the vibration of a cell phone. Since I have most of its contacts on silent mode and I don’t care much about what might be happening in the world outside my four walls when I’m asleep, I was about to turn it off. But when one of those WhatsApp calls came in from a group chat, my wife, who already had her phone in her hand, worriedly asked me not to. Something was happening. She had just heard a loud bang.

“I think something exploded in Caracas.”

As soon as she said that, we started receiving videos that quickly went viral on social media. The first one we saw was a convoy of planes and helicopters heading west of the capital, leaving a trail of explosions across the valley. The only thing missing was the classic “Fortunate Son” by Creedence Clearwater Revival as its soundtrack, typical of any Vietnam War movie.

“They’re bombing the city,” my wife added.

Is it true? That’s the first question in times when artificial intelligence can create any kind of video. So, seeing is believing, as the apostle Thomas said. Like many skeptics, I went outside to look at the sky and listen. The roar of aircraft flying over the city at that hour was enough to confirm that it wasn’t just rumors.

Indeed, they weren’t fireworks, nor was it a false alarm. I had just gotten up, and, amidst the confusion, stunned, I went out onto the terrace to listen to the explosions of the bombs, as well as to see the sky light up in different places on the horizon, despite the dense night fog that usually shrouds the mountains around the antennas of El Volcán in its whitish mantle.

“We’re safe here,” I thought naively, very casually. I went back to the room to tell my wife, exuding all the confidence in the world, that we had nothing to fear, since all the impact reports were in the area of Fuerte Tiuna and the Generalisimo Francisco de Miranda Air Base, far away enough for us to feel safe.

I will never forget the roar, that light, or the panic that I can only describe as when your blood freezes and your heart skips a beat.

But at the same time, out of pure reflex, I was getting out of my pajamas and putting on jeans, a sweater, and sneakers, anticipating that we might suddenly have to leave urgently for some unknown reason, without knowing where to find shelter.

Suspecting the possibility of a power outage, I turned on the phone, and in less than two minutes it rang. I didn’t want to answer, but when I realized it was one of my good friends from school, one of those I’ve seen twice in the 20 years since he left the country, I had to.

José Ricardo, with the classic greeting, “What’s up, Joe?”, immediately asked if we were okay, and I could only tell him the same thing I told my wife.

—Aircraft and explosions can be heard in the distance. We’re far away, everything is calm, but it sounds like things are rough and it’s raining bullets along the Guaire River.

I promised to call him with more details as soon as the sun came up. At that precise moment, I didn’t have much to say, other than confirm that the bombing of Caracas was true.

—Nothing’s happening here in El Hatillo—I said before hanging up, unaware that, in a matter of seconds, I would eat my words. I left the phone plugged in to recharge the battery and went out onto the terrace to continue contemplating the sky and listening to the buzzing and booming sounds. The only thing running through my head was the lyrics and melody of Pink Floyd’s “Goodbye Blue Sky”: Did you see the frightened ones? Did you hear the falling bombs? Did you ever wonder why we had to run for shelter when the promise of a brave new world unfurled beneath the clear blue sky?

It was impossible not to recall what my grandfather once told me about his adolescence during World War II. Of all the grim anecdotes in his repertoire, the one that impressed me most was the terrifying sound of the bombings, when they heard the sound of the planes flying overhead, the whistling and the impact, the shaking of the ground making the walls and ceilings creak, as if death were dancing above their heads, claiming lives without distinguishing between the righteous and the sinners. “The only thing you can do,” my grandfather would say, “is pray that that hell won’t last long.”

That cruel memory haunted me just as I heard the roar of the engines approaching and I looked up. I heard the whistling sound and didn’t even have a chance to move. I was petrified with terror. The explosion illuminated the bleak landscape as if the sun had peeked out for that fleeting moment, adding color to a blast that shook the floor, walls, ceiling, and windows of the house with the force of the most violent earthquake.

I will never forget the roar, that light, or the panic that I can only describe as when your blood freezes and your heart skips a beat. The sound of war and a bombing raid is the most terrifying thing I have ever heard. No one can imagine it until they experience it firsthand, murmuring prayers to God for it all to end quickly, for the bombs to stop falling, and for dawn to break, while the uncertainty of what the end of the storm will bring gnaws at you from within.

As of December 2025, new laws came into effect making Hainan a separate customs zone and consolidating a favorable regulatory environment in the southernmost province of China.

The move contrasts with the current global trend of protectionism, as many countries move to tighten trade rules and investment controls.

Hainan is now effectively the world’s largest free trade port by area. Encompassing over 35,000 square kilometers, it is roughly fifty times bigger than Singapore and even slightly bigger than Belgium.

China is attempting to offer a solution for the “growing uncertainties in the global economy” and trying to replicate the success of Singapore, with a free trade port the size of a European nation.

According to the state-run Xinhua news agency, the launch of “special customs operations” is not merely a policy tweak but a fundamental restructuring of how the island province interacts with international markets.

The unique framework, instituted by the Chinese Communist Party, could make Hainan the most business-friendly jurisdiction in the world.

This is not the first time the state-led economy, described as a socialist market economy, takes a page from the capitalist playbook to boost its global dominance.

Special economic zones (SEZs) have been successfully implemented in China since the late 1970s, as part of the country’s economic open-door policy. These SEZs allow Beijing to experiment with capitalist mechanisms, in limited areas, while maintaining broader state control over the economy.

In 2020, the CCP unveiled a comprehensive plan to shift Hainan from a mere special economic zone to a strategic hub designed to rival Hong Kong, Singapore and Dubai.

Creating a completely separate trade and investment system for the province was the objective until the end of 2025. Going forward, the party projects that Hainan will reach “institutional maturity” by 2035 and achieve a “strong global influence” by the middle of the century.

First line open, second line controlled

The province comprises Hainan Island and various smaller islands in the South China Sea, and now operates under a “two-line” customs system designed for greater openness while maintaining domestic security.

The first line marks the boundary between Hainan and the global economy, where most trade barriers have been removed. Under the new legislation, the majority of goods can enter the province freely, with a significantly expanded list of zero-tariff imports covering raw materials, equipment and consumer products.

The second line functions as a filter between Hainan and mainland China. There, standard customs rules apply, with goods subject to tariffs and controls intended to protect domestic markets.

However, the system creates a powerful incentive for manufacturers. Goods entering Hainan that achieve at least 30% added value within the province can enter mainland China duty-free, a policy designed to encourage additional production on the islands rather than using it solely as a transit hub.

For example, Australian beef can be imported into Hainan duty-free. Then, if the beef is sliced and packaged for China-destined hotpot products on the island province itself, it can enter mainland Chinese supermarkets with the same exemptions.

China’s strategic gateway

The scope of the CCP’s plans for Hainan extends well beyond customs arrangements.

The province applies a flat corporate tax rate of 15%, lower than those in Hong Kong (16.5%), Singapore (17%) and mainland China (25%).

Hainan is now also operating under a distinct regulatory framework in several other areas, which differs significantly from regulation on the mainland.

For instance, if a pharmaceutical product or medical device is approved by one of many regulatory agencies anywhere in the world, it can be used on the island province despite being banned on the mainland.

Similarly, companies registered in Hainan can apply for broader internet access, allowing them to bypass the so-called “Great Firewall of China”, a system of laws and technologies enforced by the CCP to control online activity nationwide.

Foreign companies can also open special bank accounts in Hainan, with capital flows exempt from mainland foreign-exchange controls, while foreign universities are permitted to establish campuses without a Chinese partner.

Visa-free entry to the province has also been expanded from 59 to 86 countries, now including the United States, Germany and Australia, as well as several countries in the Middle East and South America.

Visitors can stay for up to 30 days without a visa for business, medical treatment or tourism, as the authorities also promote the island province as a major travel destination.

Amid rising tensions in the global economy, Hainan serves as China’s “pressure valve” offering a low-tax, zero-tariff, high-access gateway to Asia-Pacific markets.

Published on
01/01/2026 – 16:59 GMT+1

President Donald Trump has eased pressure on two key import sectors — furniture and pasta — by delaying or scaling back steep tariffs shortly before they were due to take effect on 1 January, 2026.

For furniture, Trump has postponed planned tariff increases on certain imported home goods for one year, keeping existing duties in place while allowing further negotiations with trading partners.

On Wednesday Trump signed a proclamation delaying the scheduled increases — originally set to take effect on Thursday — until January 1, 2027.

The order preserves the current 25% tariff on “certain upholstered wooden products,” kitchen cabinets and vanities, rather than allowing it to rise to 30% for upholstered furniture and 50% for kitchen cabinets and vanities as previously directed.

“The United States continues to engage in productive negotiations with trade partners to address trade reciprocity and national security concerns with respect to imports of wood products,” the White House said in a statement announcing the move.

The furniture tariffs were imposed in September 2025 under a broader push to reshape US trade relationships and protect domestic industries. In addition to the 25% on furniture and cabinets, the administration also placed a 10% duty on imported softwood timber and lumber late last year.

The higher rates that were set to begin this week would have hit imports from major suppliers like Vietnam and China particularly hard and come amid ongoing concern about rising consumer prices.

Separately, the US Supreme Court is expected to rule on the legality of some broad tariff measures imposed under national security authorities, a decision that could have wider implications for Trump’s trade strategy.

In contrast to the furniture delay the Trump administration has significantly reduced planned anti-dumping duties on Italian pasta, offering relief to several major brands after months of dispute.

The US Department of Commerce had initially proposed very high provisional anti-dumping duties — more than 91% — on certain imports of Italian pasta, on top of an existing 15% general tariff on EU food products.

Following a review and consultations with Italian authorities, the United States lowered those planned tariffs sharply. La Molisana will face a 2.26% duty, Garofalo will face a 13.98% duty and eleven other Italian producers will face 9.09% duties.

“The redefining of these tariff rates is a testament to the US authorities’ recognition of our companies’ effective will to cooperate,” Italy’s foreign ministry said in a statement.

Italy had been working with both the US government and the European Commission since October 2025 to find a solution to the dispute.

The US market remains crucial for Italian pasta producers. Exports of pasta to the United States were estimated at about €671 million in 2024, representing roughly 17% of Italy’s total pasta exports.

U.S. President Donald Trump’s sweeping April 2025 tariff measures sent shockwaves through financial markets while upending decades of carefully built trade relationships worldwide, marking the most significant U.S. trade policy shift in at least a century. Economic experts immediately warned that raising the average effective U.S. tariff rates from just under 1.0% to between about 22.5% and 24%, the highest since 1910, could be catastrophic for an economy that was among the few to show significant growth coming out of the pandemic.

Since “the tariff increases were significantly larger than expected,” U.S. Federal Reserve Chair Jerome Powell said in a speech two days after their announcement, “the same is likely to be true of the economic effects, which will include higher inflation and slower growth.” George Pearkes, a macro analyst at Bespoke Investment Group, and Justin Wolfers, professor of public policy and economics at the University of Michigan, both told Investopedia the size of the tariffs significantly increased the likelihood of a recession, with JPMorgan forecasters raising their risk of a global recession to 60%.

Tariffs and the Potential for a Recession

The rationale economists give is based on several mutually reinforcing outcomes they view as likely:

1. Direct consumer impact: “These tariffs are going to hurt. A lot,” Wolfers wrote in a piece for the New York Times, adding that “they are going to reshape your life in much more fundamental ways”—more akin to a “crash” than a “jolt”—compared with those from the first Trump administration. The tariffs are expected to raise consumer prices by 2.3% in 2025, an average loss of about $3,800 per U.S. household, with the proportional effects growing worse for those lower on the income scale. Higher costs will come, too, from knock-on effects beyond the price tags for foreign goods. For example, “higher prices for auto parts will raise insurance costs,” Wolfers pointed out to Investopedia.
2. Business investment and supply chain disruptions: Half of U.S. imports are production inputs, meaning tariffs directly increase manufacturing costs for American companies that need them to make finished products. On the heels of the April tariff changes, many analysts projected it would decrease real gross domestic product (GDP) growth by about 0.9% in 2025, with exports projected to fall 18.1%.
3. Global retaliation: Trading partners are sure to counter with their own tariffs, causing blowback for the world’s economy: the World Trade Organization warns of a potential 1% contraction in global trade volumes.
4. Problems facing any U.S. Federal Reserve response: Specific sectors are expected to see major price increases (see the table on this page), potentially creating a combination of rising inflation and economic contraction called stagflation—something that the U.S. Federal Reserve would find difficult to address since its primary tool, interest rates, can’t address both prices and growth at the same time.

If the tariffs do lead to an economic contraction, how you prepare depends on your circumstances:

Long-term investors: “Your focus right now should be structured by your time frame. For anyone in the long term—10-plus years, like retirement accounts—today’s headlines don’t matter,” Pearkes said. “Don’t try and time the market, you won’t be successful.”

Short-term investors: “For shorter-term investors, it’s hard to see a positive catalyst in the near term,” Pearkes said. “The better entries to step in and buy are likely going to come later.” In other words, those with shorter time horizons might consider maintaining higher cash positions until the markets stabilize.

Consumers: With projected price increases of 2.3% across the board and significantly higher in categories like food (2.8%) and apparel (17%), households should consider doing the following:

• Review your budget to account for higher prices on imported goods.
• Consider accelerating major purchases in categories facing steep tariffs before they arrive, then switching to delaying, if you can, those purchases once they are in force.
• Build emergency savings.

The Bottom Line

“Few propositions command as much consensus among professional economists as that [free] world trade increases economic growth and raises living standards,” noted Harvard economist Greg Mankiw has written. Economists now worry the April 2025 U.S. tariffs could trigger a recession. With global markets in turmoil and businesses beginning to implement layoffs, the question is how severe and widespread the pain will be. “No one wins a trade war,” Wolfers said.

What started as a niche corner of the internet has evolved into a multibillion-dollar industry.

In 2025, prediction markets have become a substantial instrument for speculation and the forecasting of real-world events in both finance and media. Two major players in the sector, Polymarket and Kalshi, have amassed a combined volume of over $37 billion (€31.5bn) in wagers placed this year, according to the 2026 Digital Assets Outlook Report.

A prediction market is essentially a platform where people bet on what they think will happen, and the price of the bet becomes a forecast. For example, instead of asking people directly or through on-the-street interviews who they expect will win an election, you let people put money on their answer.

The market price tells you what outcome people collectively think is most likely, and the forecast updates in real time, which is why some believe prediction markets capture collective thinking better than polls.

The sheer amount of capital flowing through these exchanges has triggered a gold rush. This month, Kalshi secured a Series E funding round of $1 billion(€850mn) valuing the platform at $11 billion (€9.4bn).

Polymarket hit a milestone back in October when Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, announced a strategic investment of up to $2 billion (€1.7bn) and valued the platform at $8 billion (€6.8bn). Additionally, ICE became the distributor of Polymarket’s data to institutional investors globally.

The overall interest from financial institutions is undeniable. Terrence Duffy, the CEO of CME Group, the world’s leading derivatives exchange, described prediction markets as “a legitimate domain of speculation and information aggregation that our clients are demanding” during their third-quarter earnings call.

EU-based or homegrown prediction markets have yet to take off, and EU regulations have kept the existing ones largely offshore.

From beating polls to signing partnerships

As platforms, prediction markets function similarly to a financial exchange. Users buy and sell binary contracts, betting yes or no, on the outcomes of unknown future events such as election results, corporate earnings reports and sports scores.

Typically, these contracts pay out $1 if the event occurs and $0 if it does not. For example, if a contract is priced at $0.50 it implies that the collective belief of the participants is pricing a 50% probability of an event occurring.

The relevance of prediction markets was cemented after the 2024 US presidential election and the 2025 German snap election. In both cases, these platforms functioned as real-time scoreboards, consistently pricing outcomes and delivering predictions that were nearly as reliable or even more so than traditional polling.

This perceived accuracy has now forced legacy media to adapt.

Earlier this month, CNN set a global precedent by partnering with Kalshi to integrate live prediction market data into its broadcasts. A couple days later, CNBC made a similar announcement.

Before the recent partnerships, several media outlets were already starting to incorporate these predictions into their regular news stories, such as interest rate decisions and legislative votes, granting them similar editorial weight to conventional polling.

Hyper-commodification, insider trading and outcome manipulation

Critics of prediction markets argue that they have effectively gamified everyday human outcomes, drawing a dangerously thin line between serious forecasting and high-stakes gambling.

This gamification has accelerated a phenomenon some call “hyper-commodification”, which refers to the process of turning every aspect of social life into a commodity that becomes subject to market forces.

In its worst form, the phenomenon encourages gambling, creates new opportunities for insider trading and incentivises manipulating the outcomes of real-world events.

In early December, a Polymarket trader nicknamed “AlphaRaccoon” sparked controversy after winning 22 out of 23 bets related to Google’s 2025 Year in Search rankings.

The trader netted over $1 million (€850,000) in 24 hours, and was later accused of being a Google employee who used internal access to proprietary search data to find out the most searched terms ahead of the company’s announcement.

The incident raised concerns about the integrity of prediction markets, especially since the fact that users can be anonymous makes it more difficult for those engaging in insider trading to be immediately weeded out.

In late October, Coinbase CEO Brian Armstrong, who leads one of the largest crypto assets exchanges, turned the company’s third-quarter earnings call into ademonstration of the risks of outcome manipulation in prediction markets.

In the European Union, the crackdown on prediction markets began in late 2024 when the French National Gaming Authorityblocked Polymarket, ruling that its operation constituted unlicensed gambling.

The Romanian National Gambling Office (ONJN) blacklisted Polymarket in October after it hosted wagers on the Romanian 2025 presidential election held in May. In this case, the volume traded exceeded $600 million and the President of ONJN stated that “regardless of whether you bet in lei or crypto, if you bet money on a future result, under the conditions of a counterpart bet, we are talking about gambling that must be licensed.”

However, there are still many EU member states where prediction markets are accessible, such as Germany and Spain. The broader EU regulatory landscape remains fragmented, with no unified framework in place.

As we head into 2026, prediction markets also face the full implementation of the EU’s Markets in Crypto-Assets (MiCA) regulation, as most of these platforms make use of blockchain technology.

By July of next year, the grandfathering period ends for securing a Crypto-Asset Service Provider licence. According to the European Securities and Markets Authority, MiCA contains strict market abuse regimes that will apply to any prediction market using crypto assets.

The new reality is that every world event is being priced in real-time and the EU must decide if it will be a part of this era or opt for an outright ban.

Last week, the Deputy Chief of Staff for Policy and Homeland Security offered a sharply different account of Venezuela’s 1976 oil nationalization. It is provocative, but it does not hold up to the record.

President Carlos Andrés Pérez (1974-1979) proclaimed the takeover of the petroleum industry on January 1, 1976. The announcement occurred at the Mene Grande oilfield in Zulia. Crucially, the transfer from private control to a state-run model went smoothly. The major multinationals were compensated, invited to work with the new state-owned company, Petróleos de Venezuela (PDVSA), as service and technology providers, and the process triggered no diplomatic incident with the United States. A brief look at the facts does not support claims of “theft of American wealth and property,” since “the tyrannical expropriation” was precisely engineered to avoid the kind of rupture Miller describes.

The nationalization of the Venezuelan petroleum industry responded to global events unfolding in the Middle East around 1970. To be sure, Venezuelan politicians had long dreamed of granting the state full control over the most important sector of the country’s economy. However, plans for an eventual state takeover of the oil fields remained nebulous, a goal set for a distant future. Muammar Qaddafi (1969-2011) in Libya, of all figures, provided Venezuelan lawmakers with a concrete horizon for materializing full control over the hydrocarbon sector. The Libyan strongman unilaterally increased royalties and taxes on multinationals, with Iran pursuing a similar approach. OPEC then formalized this push for higher prices at its December meeting that year. What followed in 1971 sent shock waves across the world: Libya nationalized its oil industry, followed by Algeria and Iraq. This process quickly expanded to the rest of the Middle East, setting the backdrop for the fuel shortages of that decade and the energy crisis of 1973. 

This global context greeted President Rafael Caldera (1969-1974), a Christian Democrat of COPEI, who was intent on capitalizing on these favorable winds. Soon, every political faction in Congress sought to outdo the other in displaying their anti-corporate credentials. Caldera stood at the top as the most nationalist of the pack, passing an unprecedented package of bills and decrees destined to expand government control over the industry significantly. By the time he handed power to Carlos Andrés Pérez from Acción Democrática (AD), de facto state control over the entire industry was already in place. Nationalization became the only politically safe position when the electoral campaign of 1973 started. Once elected, Carlos Andrés Pérez authorized the creation of a Presidential Commission in charge of studying the state takeover and proposing a bill to that effect, to be approved by Congress in 1975. Ordinary Venezuelans shared this renewed fervor for ownership over the national riches of the country, though in a conflicted way.

Polls by the weekly political magazine Resumen showed broad support for nationalization. Yet respondents also rated working conditions at the foreign oil companies very favorably and many wanted foreign capital to remain involved after the takeover because they trusted the firms’ experienced managers. At the same time, they doubted the state’s capacity to run complex industries, while still believing it could improve over time and that a state-run oil sector was in the nation’s interest. That nuance rarely appeared in Congress.

The nationalization became a fait accompli without antagonism with the U.S. government or the multinationals

COPEI and a constellation of center-left and leftist organizations pushed for an immediate, total takeover without any foreign role. Some opposed compensation altogether and even welcomed a showdown if necessary, seeing local employees working for these multinationals as threats to a “genuine” nationalization of the industry. Venezuelan managers soon came under attack from politicians accused of having “their minds colonized” by the American and British firms. They were also viewed as “centers of anti-Venezuelan activity.” Insults in the press and public spaces galvanized domestic employees to take action. Led by Venezuelan mid-level managers such as Gustavo Coronel from Royal Dutch Shell, the managerial class came together to form Agrupación de Orientación Petrolera (AGROPET). The nonprofit aimed to help the country prepare to take full responsibility for the hydrocarbon sector.

From March 1974 through 1975, AGROPET ran a public campaign for an orderly, compensatory nationalization built on continuity, not a politicized break. Their activities included appearing on radio programs, giving TV interviews, publishing in newspapers, and participating in public forums, including congressional meetings, and talks with members of the  Presidential Commission mandated by President Pérez. The irony of this body is that it gathered representatives from prominent sectors of society. And yet the Commission excluded the people who actually ran the industry.

AGROPET quickly steered the nationalization debate back toward a technocratic solution. The organization’s pivotal moment came in January 1975, when its leaders met with President Pérez and laid out what became the blueprint for the 1976 nationalization. They argued for an industry built on administrative efficiency, technological progress, apoliticism, and sound management not a politicized rupture. Their model envisioned a holding company with four affiliates that would absorb concessionaire operations. The new organizational culture would blend practices inherited from the Creole Petroleum Corporation and Shell, and the nationalized industry would retain ties to its foreign predecessors. Under this proposal, Petróleos de Venezuela (PDVSA) became, in effect, the direct descendant of the multinationals that built Venezuela’s modern oil industry. It perpetuated the business philosophy of the multinationals. Persuaded by Venezuelan managers, Pérez sided with the technocrats and sent an amended nationalization bill to Congress, crucially allowing foreign capital to return under Article 5. The AD-dominated legislature defended the bill and enacted it in August 1975. Two months later, Creole and the other firms accepted a compensation package of about $1 billion for their expropriated assets.

The nationalization became a fait accompli without antagonism with the U.S. government or the multinationals. It constituted less a watershed than a continuation of relationships the Venezuelan state and foreign oil companies had built across the twentieth century on new terms. PDVSA quickly signed service and technology agreements with the very companies it had expropriated. What’s more striking is that this smooth outcome became, in part, an unintended consequence of Venezolanization: the deliberate integration of Venezuelans at every level of the corporate ladder, a policy initiated by Creole and Shell in the 1940s. Unusual in the industry at the time, it stood out as a strand within a broader set of corporate social responsibility practices these companies implemented in Venezuela. Locals trained through that system helped make the transition to state control orderly and broadly beneficial.

For much of the political opposition, however, the outcome felt bittersweet. They denounced its chucuta nature (a “half-baked” nationalization) and framed Article 5 as outright betrayal. Many wanted the kind of dramatic showdown associated with Cárdenas in Mexico, Mossadegh in Iran, or Velasco Alvarado in Peru, cases where claims of expropriation and “theft” of U.S. property could at least be mounted. Venezuela in 1976 stood far away from that drama, and once the transfer was complete, business continued as usual despite the lamentations of certain congressmen. Venezuela’s 1976 oil nationalization was engineered to preclude confrontation. Getting the history right matters. If the current U.S. administration wants to cite this episode to justify pressure, escalation, or exceptional measures, it has chosen a poor example, precisely because the process avoided the kind of rupture Mr. Miller invokes. So, por este camino no es.

Toyota is revving up its US manufacturing ambitions. Last month, it announced—or seemed to announce—plans to invest up to $10 billion across its American operations over the next five years: a pledge that arrived just as its first US-based electric-vehicle battery plant officially began production. The Japanese automaker, which has been building cars in the US since the 1970s, framed the expansion as a milestone moment in its long American road trip.

The new battery facility in Liberty, North Carolina—Toyota’s only such plant outside Japan—comes with a separate $14 billion price tag. It also promises to create up to 5,100 jobs. Production has already begun on batteries for the Camry HEV, Corolla Cross HEV, RAV4 HEV, and a still-secret EV model. 

“Today’s launch of Toyota’s first US battery plant and additional US investment up to $10 billion marks a pivotal moment in our company’s history,” Ted Ogawa, CEO of Toyota Motor North America, said in a statement. “Toyota is a pioneer in electrified vehicles, and the company’s significant manufacturing investment in the US and North Carolina further solidifies our commitment to team members, customers, dealers, communities, and suppliers.”

Transportation Secretary Sean Duffy applauded the expansion, calling it “the latest show of confidence” in the Trump administration’s reshoring efforts. 

Not So Fast

According to Reuters, Toyota public affairs officer Hiroyuki Ueda then clarified that the company never explicitly promised the new investment. 

Turns out, Toyota only confirmed that it invested roughly $10 billion in the US during President Trump’s first term: and despite Trump suggesting a new pledge, the company says no such commitment was made, noting instead that by 2021 under President Biden, it had already boosted its total planned US investment to nearly $13 billion, including some 600 new manufacturing jobs.

“We didn’t specifically say that we’ll invest $10 billion over the next few years,” Ogawa said, adding that Toyota remains committed to its ongoing US investment and job creation.

But with global automakers increasingly seeking American factory space—Hyundai, Honda, Nissan, Rolls-Royce, Volvo, and Volkswagen among them—Toyota’s announcement underscores an industry-wide trend: In the age of tariffs, supply-chain anxiety, and political whiplash, expanding in the US is the path of least resistance. 

There were long faces in Brussels in early October when Czech parliamentary elections handed a victory to Andrej Babiš’s ANO party. And even longer ones a month later when Babiš, short of a majority, announced plans to form a coalition with the far right, pro-Russian SPD and the eccentric, libertarian Motorists alliance. 

Although the jury is still out on whether this new populist government will join those in Slovakia and Hungary to form an anti-EU front in Central Europe, it will look very different from the pro-EU, pro-Ukraine Spoulu (Together) government it replaces, headed by Petr Fiala. 

Babiš Returns to The Czech Republic — and Repositions Himself

Returning to the premiership—Babiš, aged 71, was prime minister from 2017 to 2021 and before that deputy prime minister and finance minister from 2014—is a major personal victory for the Czech Republic’s richest man, estimated to be worth over $4 billion. Babiš’ made his fortune through his holding company, Agrofert, the now-huge agribusiness and chemicals powerhouse he founded in 1993. 

Babiš has moved steadily to the right, with ANO’s populism a long way from the centrist positions ANO (YES) championed when Babiš set up the party in 2012. Although dubbed the Czech Trump for his anti-establishment outbursts and authoritarian rhetoric, observers believe Babiš Mark II will be more measured, favoring stability and prioritizing his business interests and those of the Czech Republic. 

“An ANO-led government will face institutional constraints on its near-term ability to implement significant policy shifts, notably the outgoing coalition’s constitutional majority in the upper house [the Senate], where it holds 60 of 81 seats,” argues Malgorzata Krzywicka, director, Sovereigns at Fitch Ratings. “[We expect] a broadly prudent fiscal policy, although it is likely to adjust foreign policy, notably regarding alignment with some EU priorities.”

Babiš, Like Trump, Has a Second Act

Another potential issue for Babiš is centrist, pro-EU President Petr Pavel’s power to veto ministerial appoints and legislation. Meanwhile, the prospect of a populist anti-EU front amongst the four Visegrad countries must be measured against next April’s parliamentary elections in Hungary. Polls suggest Prime Minister Viktor Orban is running well behind his pro-EU challenger, Péter Magyar. 

That said, Babiš’s return to power—like US President Donald Trump’s, after a gap of four years—will likely mean change. 

“Divergence from Spolu’s strongly pro-Western stance is likely, for example over providing munitions to Ukraine,” reckons Krzywicka. It could lead to disputes with the EU in such areas as energy or migration, she added.

That said, “we think these are highly unlikely to intensify sufficiently to have consequences, such as the suspension of EU funds.” 

In a historic appointment, Satsuki Katayama became Japan’s first female finance minister in October, taking the reins of the powerful portfolio at a moment of acute economic tension in the country.  

A veteran bureaucrat and politician, she brings deep institutional knowledge. Katayama previously climbed the ranks of the Ministry of Finance (MoF), including a high-profile role in the influential Budget Bureau. That’s a rare feat for a woman in the 1980s and 1990s. 

Katayama’s immediate challenge is managing newly seated Prime Minister Sanae Takaichi’s core economic priority: growth through fiscal expansion.

Takaichi is betting big on a stimulus package, estimated at over $65 billion, that aims to bolster household consumption, energize regional economies, and spur the “virtuous cycle” of sustained wage and price growth.

Such aggressive spending puts Katayama at cross-purposes with economists concerned about Japan’s financial health, however. 

With the country holding the world’s highest debt-to-GDP ratio and committed to achieving a primary surplus in fiscal 2025, she must convince financial markets that the new spending is both “proactive and responsible” while working to reduce the debt-to-GDP ratio. 

The external environment adds layers of complexity. The Bank of Japan held its policy rate steady, focusing on securing its 2% inflation target. But the recent economic contraction and pressure from Takaichi for cautious rate hikes create a difficult path for monetary normalization. The prime minister recently voiced concern over the yen’s “very one-sided, rapid” weakening, a development that threatens to undermine consumer purchasing power and exacerbate import costs just as the government rolls out its spending plan. 

The Bank of Japan subsequently increased its benchmark interest rate to 0.75 percent.

Looking ahead, the finance minister’s success hinges on her ability to walk this policy tightrope: reconciling the MoF’s mandate for fiscal discipline with the political imperative for bold, stimulus-led growth. Katayama’s task is about execution.

We live in an interdependent world where no country or region is exempt from the effects of developments elsewhere. The transition into autocracies in other countries is not the exception. Autocratisation has escalated into a global wave. According to the latest V-Dem report, 45 countries are currently moving towards autocracy, up from just 16 in 2009, while only 19 are democratising. By 2024, 40% of the world’s population lived in autocratising countries.

Autocratic expansion represents a threat to liberal democracies in Europe and beyond, as political science’s only near-lawlike finding holds: democracies do not wage war against each other. In contrast, an autocratic Russia invades Ukraine and might quite possibly very soon attack the rest of Europe, as NATO’s General Secretary Mark Rutte alerted in Berlin on December 12: “We are Russia’s next target, and we are already in harm’s way… we must act to defend our way of life now”.

The link between democracy and peace was also at the centre of this year’s Nobel Peace Prize ceremony. In his address, Jørgen Watne Frydnes, Chair of the Norwegian Nobel Committee, emphasised that democracy is not only essential for peace within national borders, but also for peace beyond them. The award to Venezuelan opposition leader María Corina Machado, who insisted that the prize belongs to all Venezuelans, underscored that message.

Russia illustrates this connection with unusual clarity, and the Maduro regime is a close ally of the regime directly threatening Europe. Since Chávez, under whose rule Venezuelan democracy collapsed no later than between 2002 and 2007 (according to V-Dem), the Venezuelan regime has deepened its ties with China and Russia. The latter, particularly, became an important partner in the military and security realms. By providing weapons, equipment and intelligence support, Russia secured a geopolitically strategic foothold in South America. This allows Putin to project power into the Western hemisphere and to undermine US and European strategic interests.

Venezuela’s partnership with Russia follows a foreign policy logic of influence projection within the United States’ regional sphere, much as Washington has done in Eastern Europe. This relationship has taken the form of military cooperation, with Venezuela—alongside Nicaragua—becoming one of Russia’s main partners in Latin America.

A democratic Venezuela could reintegrate into Mercosur, opening an additional market under the forthcoming EU-Mercosur agreement—one of the EU’s tools for diversifying trade partners and reducing excessive economic dependencies.

While earlier cooperation included a visit of nuclear-capable Russian bombers to Venezuela in 2018, more recent ties have focused on military diplomacy: high-level defence meetings, training exchanges, and joint participation in initiatives such as the International Army Games. But despite Russia’s growing resource constraints following its invasion of Ukraine, reports of the construction of a new ammunition factory in Maracay (Aragua) and the presence of Russian “Wagner” mercenaries in Venezuela exemplify the possibility of going back to further military cooperation. The ammunition factory would specifically produce a version of the AK-130 assault rifle (developed in the Soviet Union) and a “steady supply” of 7.62mm ordnance under Russian license in spite of sanctions to avoid Russian ammunition exports.

Beyond the military sphere, Venezuela currently cooperates with Russia to mitigate the effects of Western sanctions. Together with Iran, both countries share shadow shipping networks that allow sanctioned oil exports to continue flowing, primarily towards China (surprise! Another autocratic country). 

Thus, from a European Security perspective, Venezuela isn’t really a distant or marginal case. A Russia-aligned autocracy in South America strengthens Moscow’s global reach at a time when Europe is already struggling to contain Russian aggression on its own continent. Supporting democratic survival or democratisation abroad is not only a normative commitment, but a strategic interest: Europe’s democratic stability—and its own way of life—are reinforced when democracies elsewhere endure.

Democratisation in Venezuela could bring concrete benefits. It would weaken Russia’s standing among authoritarian partners that depend on its support and reduce diplomatic alignment against European priorities in multilateral forums. Such alignment was evident, for example, in the 2014 UN resolution condemning Russia’s annexation of Crimea, where several Latin American governments sided with Moscow. Moreover, a democratic Venezuela could reduce the US’ attention diversion from the Russia war on Ukraine, and it could weaken Russia’s potential leverage when looking for US-concessions, in exchange for their own concessions in Venezuela.

But this is also about not missing opportunities. A democratic Venezuela could reintegrate into Mercosur, opening an additional market under the forthcoming EU-Mercosur agreement—one of the EU’s tools for diversifying trade partners and reducing excessive economic dependencies. At a time when economic strength has become an existential priority for Europe amid rising geopolitical tensions, this matters. Before Mercosur, and in the more immediate period following a transition, Venezuela would require substantial investment to rebuild its economy. Historical economic and social ties already exist, shaped in large part by post–Second World War European migration to the country.

Repression is not confined to Venezuelan citizens. More than 80 foreign political prisoners have been reported, including Europeans from Italy, Spain, Poland, Portugal, Hungary, Ukraine and the Czech Republic.

In the path towards the stabilisation of Venezuela as a partner to democracies—instead of being a source of autocratic threat—the democratic mandate expressed by Venezuelans on 28 July 2024, when we elected Edmundo González Urrutia as president, is a crucial element to consider. González has since identified María Corina Machado as his intended vice-president in a potential transition. 

In regards to the question about how to get there, the equation toward a democratic Venezuela does not only include measures to weaken the Maduro regime’s repressive capacity, but also strengthening democratic actors inside and outside the country. Many of these active citizens often move within resource-limited bounds—juggling work, precarious living situations and scarce resources for essential tools such as websites, digital security, travel for advocacy, and organisational infrastructure. Migrants in early integration phases do not necessarily count with abundant financial resources, yet they invest what they have into their democratic efforts.

At the same time, the regime’s repressive reach extends beyond Venezuela’s borders. Recent transnational attacks like the murder attempt against Luis Alejandro Peche and Yendri Velásquez in Colombia, the attempted attack on Vente Venezuela’s Alexander Maita, and the assassination of Ronald Ojeda in Chile highlight efforts to intimidate political mobilization even outside the country. 

But repression is not confined to Venezuelan citizens. More than 80 foreign political prisoners have been reported until this month, including Europeans from Italy, Spain, Poland, Portugal, Hungary, Ukraine and the Czech Republic. Thus, limiting the regime’s repressive capacity is vital to incentivize crucial pro-democracy mobilization.In summary, Europe faces a choice. Supporting Venezuelan democratisation is not only a matter of global democratic solidarity, human rights, or European soft power in Latin America. It is a matter of self-preservation. The collapse of Venezuela’s once-stable 40-year democracy and Russia’s war on Ukraine both serve as reminders that democracy—and the peace it sustains—is not a given. It must be embodied, defended, and actively built when necessary.