If anyone had any doubt, US leaders made it abundantly clear in Davos this week: Wherever things go with Greenland, Europe cannot rely on US security guarantees anymore. To defend their common interests, European nations urgently need to ramp up their military and financial cooperation.
European leaders talk as if they recognize this new reality. Yet, their actions fall far short of what is needed.
The task at hand is daunting, requiring a level of solidarity that the EU is ill-equipped to achieve. Its defining treaties leave defense and fiscal matters largely to individual member states, vastly complicating efforts to rearm rapidly.
Major European nations each have their own military industries: France buys mostly French, Germany buys mostly German. The result is a costly proliferation of incompatible weapons systems that are not produced at scale. Europe builds 50 main battle tanks a year, while Russia produces more than 1,500. A new German Leopard 2A8 costs an estimated 29 million euros (US$34.3 million); a Russian T-90, about 4 million euros. For big so-called strategic enablers such as satellite intelligence and airlift capacity, Europe is heavily dependent on the US.
Financing is similarly fragmented. Each EU country’s contribution to the common defense depends on its fiscal capacity and its individual threat assessment. Inequity and free riding abound. Germany can afford an added 500 billion euros; France, not so much. Poland, on the eastern flank, spends nearly 5 percent of GDP on defense; Spain, just 2 percent. European nations have no mutual sovereign borrowing mechanism that would allow them to fund rearmament collectively, quickly and cheaply.
Certainly, there is no shortage of solutions. A coalition of willing nations, preferably including the UK, could form a common European defense mechanism, with the authority to issue jointly backed sovereign debt and procure what is needed, without national favoritism and insufficient quantities. For a start, the effort could focus on next-generation technologies such as robotics and cyber capabilities, where entrenched national champions have not yet formed and the benefit to overall productivity might be greatest. The more nations that took part, the better the chances of creating a pan-European safe asset that could compete with US Treasuries, jump-starting the unified capital market desperately needed to attract private investment and accelerate growth.
Instead, Europe is trying to muddle through, with little success. More than a tenth of the EU’s already inadequate 150 billion euros Security Action for Europe fund, intended to encourage joint procurement, would likely go to Hungary’s Russia-friendly government — effectively a bribe to achieve the unanimity that EU rules require. The EU and UK could not even agree on terms for the latter’s participation. Northeastern European nations have made some progress in pooling resources, but they cannot and should not carry the whole defense burden on their own.
The region’s leaders must overcome such dysfunction and mount a more serious and coherent effort. More than seven decades ago, European nations came together in the hopes of ensuring peace and prosperity after the horrors of two world wars — a monumental experiment in the power of mutual benefit and shared values to triumph over narrow self-interest and ancient rivalry. It is worth defending.
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