Straws in the wind of intelligence rearmament

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German Chancellor Friedrich Merz and Japanese Prime Minister Sanae Takaichi at a summit meeting in November. Both Merz’s CDU and Takaichi’s LDP parties are traditionally staunch allies of the US (Ministry of Foreign Affairs of Japan, PDL1.0).

The departure of Tulsi Gabbard as US Director of Intelligence seems only to have accelerated the kind of shake-up that many of her critics feared. Its too early to assess the long-term impact of the latest round of firings at ODNI, but a rash of recent stories suggest key allies have already given up waiting for a return to the status quo ante in US intelligence.

The New York Times reported today on Japan’s efforts to create its first foreign intelligence agency since the Second World War.1 The US is advising on areas including cyber-defense and countering industrial espionage, but the new agency is nevertheless an implicit attempt to diminish Japan’s past reliance on American intelligence.

Japan’s plans have also reportedly been discussed with the head of Germany’s BND Martin Jäger, who is at the centre of a similar step change in his own country. The BND’s budget is set to increase by 25 per cent this year, and legislation due in the autumn is expected to grant the service expanded powers and streamlined oversight.

Reporting on these developments last month, the Financial Times offered a notably bullish account of the BND’s record:

During the cold war the BND enjoyed notable successes. Warsaw-bloc intelligence agencies often cited it as their most capable adversary throughout the 1950s and 1960s. In Afghanistan in the 1980s, it ran a vast covert network to smuggle Soviet military equipment out of the country.2

The FT noted the BND’s roots in the Nazi-era Gehlen organisation, but not the extent to which that network was penetrated by the Soviets, whose spies included Gehlen’s own counterintelligence chief, Heinz Felfe. A string of similar cases contributed to the service’s poor reputation with its US counterparts.3

In the early 2000s, the BND sought to curry favour by providing intelligence on Iraqi WMD, an approach which ultimately backfired when its agent, codenamed Curveball, turned out to be a fabricator.4

In passing over this history, the FT perhaps illustrated the new European direction it was describing, one in which policymakers are less inclined to dwell on past errors as they take on tasks that might once have been left to the CIA.

Ironically, the biggest European intelligence failure of recent times was the rejection of the CIA’s warning of Russia’s offensive in Ukraine in 2022. The Dutch newspaper Volkskrant offered an important new account of that episode last week

The failure of the Dutch and other European agencies has had few professional consequences. Only the director of France’s military intelligence service has been fired. The head of Germany’s BND was so convinced the invasion would not happen that he was asleep in a hotel in Kyiv on the night it began and had to flee the country in a panic. He became a figure of ridicule, but kept his job.5

Writing at Steady State today, former INR analyst David Abramson recalls ‘as events unfolded, the U.S. intelligence community gained a broader respect that it had not enjoyed in decades. Allied and partner government requests for the U.S. to share intelligence reporting and analysis mushroomed. Unfortunately, this level of cooperation ended in January 2025.’6

Recent cuts to the National Intelligence Council, which houses some of the US Government’s most expert analysts, will compound doubts about whether such a warning would come in a similar situation today.7 Germany and Japan already look to be cutting their cloth accordingly.

Many in Washington will see that as welcome burden-sharing, but, as the Iran War may already have shown, the corollary is less deference to US policy from hitherto dependable allies.