February 19, 2024 - 10:00am
Against the backdrop of the collapse of Ukrainian defensive lines in Avdiivka last week and presidential frontrunner Donald Trump saying that he would not defend Europe in the face of a Russian attack, calls for increased military expenditure in Europe grow ever louder. These calls appear to be emerging from the defence ministries of various countries, but it is unclear whether they are discussing these plans with their counterparts in the finance ministries.
The reality is that, after years of spending on lockdowns and energy subsidies, the average European country is struggling economically. The situation in Germany highlights this well: earlier this month the government announced its budget and committed to a limiting debt issuance to €39 billion. This, it argued, would abide by the country’s constitutional debt brake of 0.35% of GDP.
Germany currently spends 1.4% of its GDP on its military. Yet the country’s Defence Minister Boris Pistorius has recently floated the idea of raising it to 3.5% of GDP. A quick calculation suggests that hitting this target would cost around €80 billion, raising the question of where Pistorius thinks the money is going to come from. The disconnect between rhetoric on military spending and budgetary realities is glaring in country after country, yet the media never seems to raise the question with politicians.
In response to Trump’s comments, British Defence Secretary Grant Shapps told Nato allies to keep their pledges to spend 2% of their GDP on defence. But it is not clear if 2% of GDP spent on defence can even do much to help. In 2022, Britain spent 2.2% of GDP on its military, which still isn’t in good shape. In 2023 the British Army had 75,980 active personnel while the German Bundeswehr had more than double at 181,670 — despite Germany spending less on its military than Britain.
Then there is the question of deindustrialisation. After denying that Europe was deindustrialising due to a lack of cheap Russian gas for months, politicians and commentators are now accepting this reality. But how can Europe retool its military if its factories are facing closure? European military output was lacklustre even prior to Russian gas being shut off; now that the continent faces a rolling crisis of energy costs, do defence ministries across the continent really think that it will improve in the future?
What’s more, economies across Europe are stagnant, tipping in and out of recession. Last week it was announced once again that Britain was back in technical recession. These technical recessions are not real recessions, of course, because we do not see widespread job losses. But at some point, a real recession will rear its ugly head due to the fragility of these stagnant economies. At that point, the budgetary pressures currently felt will be greatly exacerbated by falling tax revenues and rising unemployment claims.
Our leaders increasingly appear to be living in a fantasy world, completely detached from the economic realities that we face. They seem to think that arming Europe in preparation for a war with Russia that will likely never come is simply a question of will. But the reality is that there are real constraints to such plans, whether budgetary or industrial. If wishes were horses, then beggars would ride, as the old proverb has it — and it looks increasingly like European defence ministers will be walking to work in the coming years.
Philip Pilkington is a macroeconomist and investment professional, and the author of The Reformation in Economics
philippilk
Join the discussion
Join like minded readers that support our journalism by becoming a paid subscriber
To join the discussion in the comments, become a paid subscriber.
Join like minded readers that support our journalism, read unlimited articles and enjoy other subscriber-only benefits.
SubscribeWhy on earth would Britain have an army as large as Germany’s? We are an island nation and have never had large peacetime standing armies.
What we need is nukes, subs, ships, air defence, hardened infrastructure, intelligence and cyber. Plus a few well trained and equipped regiments of paras, marines, rangers, SFs etc.
By concentrating on ships and aircraft, we are maintaining our industrial skill base in Barrow, Warton, etc.
It would be crazy to divert money and focus to creating large land forces. That should be the job of our allies – the Germans, French, Poles etc.
Precisely how much and what mix and which country has and does what are details.
The point is that the US is no longer going to be able to cover the cost of defending Europe. We no longer have the money, the industrial capability or the manpower to do it.
So, Europe can choose to go naked as to being able to defend itself or it can figure out a way to provide for it’s own defense.
You expect the US to come running with men and material if something goes wrong, but are you ready, willing and able to come support the US in the Pacific if something goes wrong with China or North Korea?
Are you so thoroughly convinced that Russia poses no threat to your national interests or that maybe Iran or China do not pose a threat, that you simply feel that you do not need a muscular defense? There is almost no point in having any defense at all if you are going to be so small, so undermanned and so underarmed that the force you can put up is easily crushed.
Ya know, Europe wants and expects to be treated with respect, to be heard and to be listened to when the US, China, Russia and other powers are out making decisions. But why should they listen? There are two major spheres of power, economic and military, that determine whether you are a power to be feared or respected, and Europe has neither. Nobody need fear or be dependent on Europe unless they think the US will back them with force. Therefore nobody needs to listen to Europe when global geopolitical or economic decisions are being made.So, either accept that and live with it, or get cracking on building your military, scrap a lot of your Net Zero energy policies, rebuild your manufacturing capacity, and increase your wealth and productivity. That means work for more years, work more hours per year, and give up some of your social safety net to buy fighter aircraft, artillery, bombs and bullets.
You misunderstand me Daniel. I totally agree with you that Europe should arm itself to confront Russia. The continental powers should have large, well resourced armies capable of stopping Russian troops rolling over the border. Germany, France, Italy and Poland have neglected this responsibility for years. They must get serious about their own defence.
My point is that Britain has a different role to play. We are an island nation with nuclear weapons and can mount a pretty solid defence against invasion. What we need is a formidable navy and airforce to protect our island, our overseas territories and our trade routes. That is where we should specialise. Indeed these are the capabilities that the government strategic framework aims to increase at the expense of the army.
We are of course allies of the other European countries and we could help them with our ships, subs etc while they concentrate on infantry, artillery and armour – for instance if a blockade of Russian ports was required. We could also offer them protection under our nuclear umbrella if the USA decides to remove theirs.
In terms of aiding the US in the Pacific, of course we should, and a capable blue-water navy is the best way of doing so. Indeed the AUKUS is part of that planning.
I also agree with you about Net Zero. The best thing we could do is exploit our own shale gas reserves through fracking and use the cheap energy to expand our manufacturing.
My apologies for misunderstanding you.
I agree, Britain has always been safest and wealthiest when it had a powerful navy.
We could also offer them protection under our nuclear umbrella if the USA decides to remove theirs.
No mention of France there, but it’s ok. I understand.
Oh no country is going to take that offer.
My point was that the thought “The Russians are attacking, France will save us” is an odd one.
I see shades of the Roman Empire withdrawing its legions to defend its heartlands. That did not bode well.
You expect the US to come running with men and material if something goes wrong, but are you ready, willing and able to come support the US in the Pacific if something goes wrong with China or North Korea?
Speaking as an Australian, yes we are. We were there in Vietnam, Gulf 1 and 2, and Afghanistan. We’ll be there for the next one too (just so long as you sell us some nuclear submarines).
With due respect, I think you missed the point (or I did) that it was the fact that Germany spent less on the military even though they had twice the manpower. It is obviously due to the impact of military procurement in armament.
The question of expenditure is, not associated with the protection of the British Isles but the 2%NATO requirement to protect Europe(??).
Yes I see what you mean. Maybe that was the point (i’m not sure). It would be interesting to know how they did that if that is the case – perhaps arming their soldiers with broomsticks keeps the costs down 🙂 Or as Simon Davies says elsewhere in these comments perhaps the author was accidentally comparing the entire German military against the British army only.
Failing industry? Didn’t BMW used to make war machines?
Unemployment? Someone needs to make war machines.
No energy? Well does American want us to militarise or not?
Funding? The same way wars have always been funded. Print and borrow.
Germanys Bundeswehr isn’t just the army but includes the Navy and Air Force as well so this article isn’t comparing like with like when comparing it to the British army. The army only constitutes 62,800 men, so less than the British army.
Russian tanks won’t roll into Paris anytime imaginable. But the forces of global Jihad are already there, abetted by quisling globalist elites intent on destroying their host societies. What exactly would Europe be defending?
Their rights to say nonsense like this.
So which are you rooting for? The Umma, or the Rainbow Regime? Both are intolerant ideologies that despise classical liberalism, which you dismiss as nonsense.
”What exactly would Europe be defending?”
I think the answer is their Mosques….Can’t be the Churches. My Girlfriend in the Midlands tells he her Church is down to 20 members, seemingly a median age around 65, and a Vicar once in a Blue Moon. Three of the members have their ‘Lay Reader’ licenses and take turns doing the service.
They sold the Church hall and it is now a small apartment building – so they could afford the roof repairs. Many say to sell the Church to be knocked down for houses and they all go off and join another church in their same condition, and so kick the can another few lengths down the road.
I tell her it is the Welbyization of the Church, they do not believe in God anymore. I like to quote her Romans 13, this sort of stuff:
”For the one in authority is God’s servant for your good. But if you do wrong, be afraid, for rulers do not bear the sword for no reason. They are God’s servants, agents of wrath to bring punishment on the wrongdoer.”
And Revelations 19:15
”And out of his mouth goeth a sharp sword, that with it he should smite the nations: and he shall rule them with a rod of iron: and he treadeth the winepress of the fierceness and wrath of Almighty God.”
Real Christianity, one which was a much suited to the Warrior as to the Peacemaker. That is what is lost – the Muslims will not take this path, and may endure long after us if we keep the Rainbow Flag on the Pulpit and Archbishops kneeling to woke, and the congregations melting away as there is no power or authority or good and evil – just correct and incorrect, and dull at the same time.
If the Church wants to attract parishioners back, it is going to have to offer something people value. I can’t opine on what that might be, as I haven’t been into a church in over 50 years (the occasional wedding aside). In those days, boring sermons and dreary music put me off.
Using the internet I found a Tridentine (Latin) mass not too far from where I live and I now go most Sundays. It is a breath of fresh air – adoration and mystery. Much of the ceremony is sung and there are long silences throughout (which took me a while to get used to).
If you prefer rock and roll, try John McLaughlin and Carlos Santana’s Love, Devotion, Surrender, an interpretation of John Coltrane’s A Love Supreme. And pump up the volume!
I prefer the mysteries at the heart of religion to joke-cracking pastors getting down with the congregation with the help of drum kit and guitar strumming to show how with it they are.
Sometimes I find myself wondering if Justin Welby isn’t an agent of Lucifer. I can think of no other archbishop who has done more to bring the church into disrepute.
Москва payroll?
I think we’re still only scraping the surface of the issue. Even if somehow the budgets were to increase, which is hardly a guarantee in deteriorating economic circumstances, many European countries and the US are heavily indebted, meaning the fiscal bazooka is already past its prime.
Now, imagining that the countries do get their spending up, the next serious problem is that in our Western societies, we seem to have strong opinions about what we should do, but nobody seems to be actually be joining the armed forces. It is a classic story of reach exceeding grasp. The commentariat-political class has neglected the fact that they can scream and shout murder at everyone and everything, but we have little to no hard power to back it with and perhaps not without good reasons.
We have become societies where the idea of military service is not simply struggling, it’s downright disappearing. Even if bringing conscription is an option, I find that the political class has so little credibility left that I am not sure the masses will rally to the flag for them.
What I am getting at is that the woke Western countries are too far down the decaying road that nobody will sign up to defend them. Unfortunately, and hopefully not, but it might take a civilizational defeat to make us reconsider priorities and bring back some sense of civic duty and political trust.
Surely the former would preclude the latter?
Military spending is like insurance an appalling waste of money UNTIL you need it then you can’t get enough of it!!!
We won’t be manufacturing more weapon systems and ammunition until the Government stops making energy artificially expensive.
Proper funding of NATO won’t make a difference if our leaders lack the resolve to stand together.
As the West loses confidence and no longer feels comfortable standing up for basic Western Liberal Values, indeed feels ashamed of our own history, we need to recognise that both sides of the western political aisle have to learn to live with eachother because there are much bigger, nastier foes out there who are considerably more of a threat to our way of life. United we stand – divided we will surely fall.
The great ideas of the West— rationalism, self-criticism, the disinterested search for truth, the rule of law, freedom of conscience and expression, equality before the law, human rights, the separation of church and state, liberal democracy—together constitute quite an achievement for any civilization. This basic set of principles remains the best and perhaps only means for all people, regardless of race or creed, to live in freedom and reach their full potential.
These values form the basis of the West’s self-evident economic, social, political, scientific and cultural success. When such Western values have been adopted by other societies, such as Japan or South Korea, their citizens have reaped benefits.
China advanced financially by copying western style capitalism – though I very much doubt anyone from the West would enjoy living there as a free-thinking citizen – because although China adopted quasi-capitalism, they failed to adopt Western values. We in the West are free to think what we want, to read what we want, to practice our religion, to live as we choose – unless we throw it all away by allowing the neo-authoritarian-woke to dismantle this legacy. It is the West that has liberated women, racial minorities and religious minorities, by recognizing their rights.
What we in the West have in common is far more essential than what divides us. We need to re-engage with the ideas that made us great and regain the confidence to state that Western Liberal Values are demonstrably better for the people that live under them. What we consider basic liberal values are NOT a default position for most of the world. If you want the world to adopt democracy, or universal suffrage, or equal rights, or any of the other things we are lucky enough to take for granted, then you need to support the idea of Western predominance.
The West has lost influence due in large part because we have lost the confidence to demonstrate to the rest of the world that our values, our laws and our tolerance lead to better outcomes. And sometimes, to project the superiority of western liberal democratic values, and to protect our interests, that involves intervention.
Unpalatable as that may be, it is undeniable.
In our liberal media we read the bleating about China’s and Russia’s unhealthy influence and designs on the West – But such pleadings are printed right alongside editorials that repeatedly refuse to support any Western counterweight to it. They recognise the danger but cravenly appease them – just to avoid appearing belligerent – imagining that if we don’t poke the bear, or pull the dragon’s tail, then maybe they won’t eat us!!
We’ve been on the menu for a while.
Your first sentence is absolutely correct. As it is never likely to happen, especially when threatened by an aggressive expansionist nation or philosophy, we should be prepared to defend ourselves. Of course an alliance can potentially offer greater strength, but it can never be relied upon.
The West stood up to Russia during the Cold War and won. It needs to get that mindset back.
Even 2 years ago when the Ukraine war broke out I was skeptical of a lot of the talk about a lot of NATO members radically and quickly upping their military spending because it collided with what one could see about the economic realities. Two years later most economies look if anything worse. Even some of those countries who are spending over 2pc are including stuff like military pension spending to massage the figures so the substance may be less than it appears.
The worse the economies do, the lower the 2%-of-GDP target sinks…
Economic (particularly industrial) capacity trumps all else eventually.
It is truly interesting to watch as the “Elite” make these spending promises on the military, energy transition, and other big progressive ideas. Yet, Germany is deindustrializing which will impact the biggest wallet in the EU. How can they support all the spending that the EU plans out of Germany and the Netherlands. The French run large deficits too….The day of reckoning is coming soon for spending and other pie in the sky plans…you could turn on the Russian gas and oil again but if Putin had the upper hand before….
Europe’s future does NOT include Russian gas.
Perhaps – but the fact that Germany has decided to shut its nuclear facilities is mind-boggling given that Russian gas is no longer an option..what were they thinking?
The first thing you need is a strategic vision – just buying toys is no strategy. Especially if the objective is to quickly get to a high number, buying expensive toys is the easiest solution, but if your systems are not embedded into an overall strategic vision, they’re wasted.
The most important things in military preparation are training and ammunition (and to do training properly, you need lots of ammunition). Both are expensive and take time, lots of time, and they are singularly unsexy. A staff college is a much less fancy photo-op than a new rocket, but much more valuable.
The German military may be larger than the British one, but as a fighting force, it is a cypher – thanks in large part to the herculean efforts of one particularly destructive defence minister, a certain Ursula von der Leyen (affectionately known as Flinten-Uschi), but added to by her successors. It will take 10 years to rebuild a credible German army – once you start with the reform.
Germany needs another Scharnhorst and Clausewitz…
Now is the time to start. Western Europe will be in a “hot war” with Russia at some stage in the not too distant future.
The only effective way to protect citizens of a country threatened by others is to spend on defence, backed by a determination to use whatever force is necessary in using one’s armed services and materiel. Without this, all the social spending in the world is utterly useless. The solution is obvious and simple, but we lack political leaders and parliamentarians with the sense and guts to tell this to the electorate.
Professional armies are not the only solution. Imagine trying to invade Texas. Everyone has guns and knows how to use them. Train your people EU.
I’m not clear what Invading Texas has to do with it! I wasn’t proposing to invade anywhere. Or perhaps I’ve misunderstood your point?
I think his point is that a well regulated Militia is necessary to the security of a free State, and that the right of the people to keep and bear Arms should not be infringed.
They’d be real useful against tanks, fighter jets and cruise missiles I imagine!
I think NLAWs and Javelins are good for that.
Does the concept of Diplomacy ring a bell? How about stop pissing off the rest of the world by trying to steal their resources and overthrow their governments and creating chaos wherever you go. How about abiding by treaties and commitments you have made? Might be a lot cheaper than arming yourself to the teeth and sending your underclass off to f**k things up.
At least get your basic facts right.
So what are the facts?
Germany sought Canada’s go’s when Russia cut it off. The Liberal government run by ecozealots said No. The polls are so high for the Conservatives that they are sure to win. They will want to supply gas to Europe especially to gain favor for trade deals.
On the subject of defense, countries can defend themselves through conventional war, nuclear, or guerilla warfare. Think Afganistan. If an invader knows there are small arms caches and explosive depots accessible by a prepared insurgency, they will think twice. Russian snipers in WW2 made life hell for the Germans. Imagine the majority of the French had small arms training and a select group had insurgency training?
The Swiss have military training of the population. The rest of Europe could teach vetted people how to defend themselves at a relatively low cost. Much of North America are armed, not just Americans. Lots of Canadians hunt and have rifles.
Yes but Trudeau/Liberals are doing their best to disarm all Canadians. The Liberals have also cut back on defense spending and along with a shortage of equipment their DEI initiatives in the military has led to a severe shortage of both recruits and early retirees who are done with the DEI training and constantly fixing decades old, planes, ships, equipment, and technology.
“countries can defend themselves through conventional war, nuclear, or guerilla warfare. Think Afganistan.”
That is true but only to an extent and depends on what is meant by “defend”. A third world undeveloped country can–via asymmetric guerrilla warfare–convince invaders (USSR & US in Afghanistan e.g.) to eventually retreat and, when they have left, the invaded country quickly returns to its medieval standard of living. Highly developed countries with complex infrastructure dependent on advanced technology are vastly more vulnerable. Western countries cannot rely upon guerrilla warfare as defense because, even if they succeed in physically repelling an invader, the degradation of their infrastructure would be devastating to their standard of living and very difficult to quickly restore. Absent advanced missile defense and cyber-warfare systems to protect vital infrastructure, a Western country would lose its power grid, its banking system, its communications networks, its healthcare systems, its manufacturing supply chains, and food distribution networks. It would be apocalyptic and could be accomplished without stepping foot in the country. If an invader targeted only the servers powering a country’s internet with missile strikes, the consequences would be devastating and chaos-inducing. In advanced nations even the local water supply systems are computer-dependent. The Ukraine is a case in point. It is only still functioning because of the generous provision of missile defense systems and robust cyber defense efforts. Otherwise, Kiev would now look like Gaza. So, is it likely that Russia would ever attempt to occupy the UK or China occupy the US? No, of course not. But can we assume that guerrilla warfare is an adequate strategy to deter our destruction as advanced societies? Absolutely not.
The only thing that will save Europe is to close its borders to Muslim immigrants. Sadly that will only work for a generation or two as those already present procreate at a much higher rate than the natives. Absent proactive deportation of the non-assimilating, there is no defense to the Muslim tide.
Has Putin ever expressed any desire to attack and subsume the UK, France, Germany,…etc.? He only attacked Ukraine because the USA overthrew its Russia-friendly government and then expressed its’ desire for Ukraine to join NATO–which would push American nukes to Russia’s border. The whole fear industry (MIC) relies on scaring people to believe that non-sensical things will happen. If NATO wasn’t so hell bent on poking the Bear it would likely still be asleep.
Has Putin ever expressed any desire to attack and subsume the UK, France, Germany,…etc.?
No, but then Hitler didn’t telegraph his views on invasion either.
You must have skipped history class.
I’m well across the history. Hitler never made a speech saying “I’m going to invade France” or “I’m going to invade Russia”. His early work was all “salami tactics” (as the term was used in Yes, Prime Minister). “Just give me the Rhineland, and I’ll be happy”, and “Just give me the Sudetenland, and I’ll be happy”.
True but he wasn’t planning to expand westwards. He only did so when we, sensibly, refused to let him expand eastwards.
The Germans laughed at Trump when he told them they were too reliant on Russian gas. They aren’t laughing now. It has always been the accepted European military doctrine to defend Europe to the last American. I have no confidence that the ’United States of Europe’ can replace the other United States with anything like the same conviction (and certainly not capability). Once the US bankroll is removed from Europe, it’s hard to see how any future president can convince the American people that European defence is an appropriate priority for US taxpayer funds.
It shouldn’t be in any case. The only reason for an increase in European defence spending is because the US wants to rule the world and does this by destabilising any one they fear and the clowns in Europe go along with it, even though they themselves are a secondary target. The Russians have had this crap for 300 years and have decided to put an end to it.
Europe was peaceful until the Americans decided that it wasn’t and overthrew the government in Ukraine. The Russophobia of the European elite did the rest. Good luck with getting the pissed off majority of European citizens on board that sinking ship.
Well said. Many European NATO members are soon to discover that rebuilding credible defense involves much more than money. It also requires the development of human assets that do not currently exist. Hardware is only as good as the people who use and maintain it and only as effective as the officer-class that orchestrates the interaction of these complex systems to common purpose. The training edifices are yet unbuilt or undermanned. The military-educational apparatus of the US armed services is massive. The storied military academies like West Point are dwarfed by the massive resources of thousands of instructors dedicated to continual training of the enlisted. For Europe, rebuilding an equivalent apparatus at scale will take time and sustained commitment. Military service in the US is still a culture unto itself with respected living traditions. Much less so in Europe. How will Europe recruit (or conscript?) large numbers of military people? Are the young people of Germany, Sweden, and the UK who will be the target of recruitment inclined to such service, or will they–in Gen Z style–just say “uh, yeah… no” and go back to their lattes, video games, and pacifist indoctrination? How will quality of potential recruits be assured? Will military service attract mostly those unqualified for anything better paying? How many or few will make careers of it? Absent the continuity and experience of career military members any force is less effective. Although akward to say, how many immigrant Europeans now comprising a large part of the target recruiting generation even have allegiance to the notion of defending anything “Western”?
It is fighting spirit; without it one cannot temper the mind and body with adversity. The New Zealanders and Rhodesians were tough farmers and made excellent Special Forces soldiers in WW2. A farmer who has been brought up playing rugby and cricket, boxing, learning to track and shoot game, repair vehicles has all the qualities needed fro the Armed Forces.
What we have is vast numbers of effete, flabby, urban, impractical office workers. It would probably take two years of training to bring the Western office worker up to the toughness and technical skills of a New Zealand or Rhodesian Farmer of 1939. One aspect is that someone who has learnt to shoot moving game( deer, tigers, lions, water buffaloes, ) has developed the skills to hit moving targets such as planes, boats or people. Most of the best fighter aces of WW2 had been brought up shooting before they joined their air forces.
That said, recruitment in the USA Army was down by 15,000 last year – and if the military keeps its advertising aimed at lesbians and trannies, and keeps pushing DEI training, no doubt recruitment will drop even further. The Scots-Irish of the South and Midwest have been the backbone of military recruitment since the country’s inception and serving the military is a tradition in a number of these families. But its been reported that even these families are not encouraging their young to serve given the woke views of American military leadership today.
Meanwhile, both labour & the SNP are girding themselves for another tax raid on North Sea oil, which is projected to cost 100 000 jobs. I honestly don’t know what planet these clowns live on, but it isn’t this one.
This sentence is a bit vague: “In 2023 the British Army had 75,980 active personnel while the German Bundeswehr had more than double at 181,670 — despite Germany spending less on its military than Britain.” Germany does not spend money on a nuclear deterrent and does not have any aircraft carriers. You cannot make an overall comparison based on a single metric.
It would have been far cheaper if in 2000 the West had been more welcoming to Russia and if in 2010, when Putin was raising what, to him, were legitimate security concerns, we had listened.
Western funding of Maidan demonstrations and overthrow of Ukraine government was also a costly mistake.
It would still be cheaper to sit down with Putin and come to an agreement. If this was NATO-backed, he would be unlikely to break it.
Drones and accurate munitions have paralysed the front line and turned it into a meat grinder. Putin is willing and able to feed the meatgrinder. Ukraine will run out of men before he does and the West’s military support would need to match the combined output of Russia, North Korea and Iran to compete.
Is that a good outcome?