The world faces a certainty: uncertainty. Trade and military wars, as well as a weakening and questioning of societies towards liberal democracy, make the emotional state of the world one of anguish.
In the face of war, Europe is rebuilding its security architecture and defense capability, as concerned about Russia as it is about the United States, from which it continues to massively buy weapons, with military spending being a central concern.
The EU announced a rearmament plan through loans worth 150 billion euros. Almost two-thirds of the weapons imported by European NATO members between 2020 and 2024 came from the United States, a significant increase from the 52% that represented the import of American weapons between 2015 and 2019.
One possibility to achieve this would be a reassignment of the European Investment Bank (EIB) or the establishment of a “rearmament bank.” This could “allow European governments to provide substantial support to the defense sector with minimal impact on national budgets,” explains the expert.
Another alternative would be for the EIB to grant credits to arms-producing companies or “create special bonds for defense projects.” This would not directly finance personnel or military equipment, but “European defense companies to increase the supply of military capabilities in Europe.”
But the easiest and most cost-effective way would be to create a new European Union program to jointly take credit, comparable to the COVID-19 pandemic fund, of about 750 billion euros: eurobonds.
“We have had the NATO alliance for 76 years, with the United States as the main military power and security guarantor. European countries were content to depend on NATO and trusted that the United States would fulfill its commitments,” declared an associate researcher at the International Institute for Strategic Studies. The key lies in European cooperation.
Donald Trump has sidelined Europe in relation to the issue of Ukraine, approaching Russia and thus weakening NATO. Therefore, Europe must consider the possibility of defending itself without the help of the United States. What economic implications could this have?
The unexpected initiative of the President of the United States, Donald Trump, to end the war in Ukraine has brought with it, especially for Europe, the threat, more or less directly expressed by Trump, that the United States could withdraw from NATO and leave Europeans alone in defense matters.
There is a threat from the East: The danger is “that Russia intends to blow up NATO and the EU to be able to exercise its military dominance in the European continent.”
And what happened in global markets? Europe’s defense spending pushed stocks to record levels.
European stocks reach record levels led by defense stocks, while the region’s top political leaders called for an emergency summit on the war in Ukraine amid the growing call from the US to increase military spending for security.
The challenge for Europe is to defend itself without the United States.
Europe needs to strengthen its defense to have deterrence capability. Rather than shooting up its military spending, betting on its own industry and capabilities and coming out of the crisis like COVID: united and with joint debt. What Europe needs is to share a full security vision and develop the instruments that guarantee it