If you don't want to make significant cuts in other areas, the amount of money would have to be significantly raised if you want to be able to afford the anticipated level of expenditure on defense.
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| [A Canadian soldier holding NATO flag/Atlantic Council] |
The finance ministers of the member states of the European Union all take out their checkbooks. The government of Belgium plans to spend one billion euros on new military hardware, Croatia plans to increase its defense spending by 41 percent over the next three years, Denmark is striving to meet the NATO spending target of 2 percent, and Finland recently announced a one-time increase in defense spending by 70 percent. France has committed to increasing their contribution by 27 percent by 2025, the United Kingdom has committed to increasing their contribution by 13 percent by 2024, and Germany has chosen to establish a special fund of 100 millionliard euros. And the list might go on far further than this. Increases in military expenditure have been reported almost everywhere you look recently. At least, that's what we have in mind. But can the objectives of the various nations be realized, or are they only empty promises that are comprehensible as a first response to the Russian invasion but can scarcely be put into practice?
There is little question that the amount of effort put towards weapons in Europe will rise in the near and medium future. Because there is no sign of an end to the conflict, the nations that make up the Western alliance and the European Union are still reeling from the shock caused by Russia's actions and are unlikely to return to business as normal in the near future. It is not out of the question that we will go through an armament spiral in Europe, similar to what we went through during the Cold War. After all, Russia, whose strength is mostly based on its oil reserves and military forces, would undoubtedly respond to the drive for rearmament in the West. This is because Russia's power is predominately based on these two factors. The following five security, economic, and financial considerations raise significant reservations about the viability of the initiatives that have been disclosed.
First, a potential economic downturn is looming over Europe: There is a consensus among all economic research institutions, the majority of nations, and the International Monetary Fund that a prolonged economic downturn is forthcoming. The present inflation, the rise in prices of energy in particular, and challenges in global supply chains are setting off alarm bells in a variety of different manufacturing sectors. There have already been restraints placed on production, or they have at the very least been stated. If these projections are accurate – and there is very little room for debate about this – this will, very soon, lead to a huge decline in the amount of money collected in taxes. There are a lot of nations in Europe that are already in deep debt. The aftermath of the financial crisis that occurred in 2008–2009 has left its mark and the EU is still a long way from properly processing it.
Second, the expenses of the Corona pandemic: The unstable economic position that we are now experiencing has also got something to do with the Corona outbreak. Lockdowns and other steps to battle the epidemic, such as limits on public life, as well as the reduction in output in many businesses have not only placed a burden on the health sector, but they have also pushed governments to adopt extraordinary financial measures. The supposedly unshakeable pillars of European financial policy were overturned at the stroke of a pen. The Maastricht Treaty, which was signed in 1993, stipulates that the public deficit cannot exceed 3 percent of GDP and the public debt cannot exceed 60 percent of GDP. Additionally, the Maastricht Treaty states that the inflation rate in no EU country can be more than 1.5 percent higher than that of the three member states with the most price stability. At the moment, not a single one of these three conditions is being satisfied, and the EU is doing itself a favor by claiming that this is an exceptional circumstance brought on by the Corona crisis, which will be resolved as soon as humanly feasible. Although the Maastricht criteria have been brought up on several occasions, there are currently no firm intentions to return to using them.
Thirdly, the costs that have been borne to combat climate change: the conflict in Ukraine has put many of the goals for combating climate change into the background, such as rapidly reducing dependency on fossil fuels. However, at this time, certain climate initiatives that have already been authorized are through a process of reduction. At first, the decision to cut down on coal use was put off. A delay does not constitute a cancellation. After all, delaying actions to combat climate change would only result in increased costs in the long run the longer these actions are put off.
Fourth, the assistance with the military, which will be followed by assistance with the restoration of the Ukraine: It is not surprising that a number of nations have already declared their intention to not only provide the Ukraine with weaponry but also to continue lending financial and economic assistance to the nation for the foreseeable future. At the moment, it is also about providing care for refugees from Ukraine and about keeping the economy operating as normally as possible despite the fact that there is a conflict going on. After some time has passed, the damaged cities and infrastructure will need to be restored. There are no credible estimates available for the total amount of these burdens. Nevertheless, the extent to which the Marshall Plan was implemented after the conclusion of the Second World War should unquestionably serve as a point of reference for the assistance measures.
Fifth, economic ties with Russia: It is utterly impossible for Putin's administration to pursue the policy of detente before or after the end of the cold war. This is true of both before and after the end of the cold war. There is no longer the same level of political trust because of it. The effort to form a cooperation with Ostpolitik was fruitless and should not have been pursued. In the long run, the West will not only need to defend itself militarily against Putin's rule, but it will also need to reorganize its political and, most importantly, its economic connections in a new way. Both of these steps are necessary. In spite of this, Ukraine, the rest of Europe, and the United States – under whatever political structure exists at the time – will be required to negotiate with the government of Russia for an end to the conflict, or at the very least, a ceasefire. The contentious debate over whether or not to resume oil imports is evidence of how difficult it will be for Europe to function without the provision of energy from Russia in the very near future. The recent increase in the cost of electricity provides a glimpse into the potential challenges that lie ahead for us in the future. Long-term energy supply security in Europe will not be attainable without significant reductions in energy usage, as well as without incurring much higher expenses and making significant concessions to Russia.
In a nutshell, the forthcoming financial responsibilities of each and every sort cannot be managed or fulfilled, particularly in light of the fact that additional social expenses will be paid as a result of the weakening economy. Trying to deal with all of these different financial challenges at the same time would be like to trying to square the circle. It's likely that we'll have to make concessions in every area. An increase in the debt held by the public sector is another possibility. Let's be honest: it is not possible to carry out all of the expenditures that have been stated and planned for today in order to boost military capabilities. Even though the war in Ukraine is not even close to being over, it would be appropriate to take a look at the long-term consequences and to prepare the citizens for the upcoming bottlenecks and necessary restrictions. This would be appropriate even though the war in Ukraine is not even close to being over.