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At the EU summit, sources of money are being sought to be able to stand up to Russia – if necessary.
At the summit of EU heads of state and government, the association of states is once again looking for a common line. This time it’s about rearmament; about the rearmament of our own national armed forces; but also about expanding European production capacities for the production of war material. Both are a prerequisite for standing up to Russia in defense policy and providing Ukraine with sufficient military support. Opinions in the EU as to how this should succeed vary widely.
Europe must invest in military build-up. There is an investment gap of around 60 billion euros per year. That’s a lot of money. If it is spent on defense, it is not spent on daycare places, hospitals, schools or railway infrastructure. Or for investments in climate protection or social compensation payments, for example to farmers who can use less arable land to create nesting places for birds.
Unpopular challenge for the states
This is the big political challenge that all governments of all EU states face: They have to explain to their voters that it is necessary to spend more money on military rearmament and less money on social policy. This is unpopular. That’s why all governments are looking for ways to get money.
There is a proposal on the table to skim the profits from the frozen Russian central bank assets and pass them on to Ukraine. That’s welcome, but it won’t be enough. And it cannot replace investments in one’s own defense.
More shared debt?
The Baltic states, Poland and France are stimulating a debate about new euro bonds and common debt. Others don’t want to know anything about it. Such bonds also have an expiry date and must be repaid. The majority of EU countries are heavily indebted. Nobody wants to take on more debt or decide on further tax increases in economically weak times.
Legend:
Hungarian Prime Minister Viktor Orbán (l.), Spanish Prime Minister Pedro Sanches (r.) and French President Emmanuel Macron (from behind) exchange ideas at the EU summit.
Keystone/Oliver Hoslet
There remains hope for more investment from private investors. The European Investment Bank EIB will now also support military build-up with financial guarantees. This shows how old certainties in the EU can be questioned. The Investment Bank was founded together with the European Community almost 70 years ago. With the same goal: to promote peace through economic equalization across national borders.
From the peace bank to the weapons bank
The 27 heads of state and government are now suggesting a change to the statutes of the venerable institution. The investment bank’s mandate is to be expanded to include the task of accelerating the production of war material in Europe. The question of financing a European rearmament program and the question of how Ukraine can be supplied with war material more sustainably are politically sensitive and complex.
The debate has been going on for months now and will not be over for some time. But that’s not necessarily a sign of weakness. The call for a quick transition to a war economy is cheap. It is expensive to seek a political consensus in Europe that has broad democratic support.