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Europe crosses the Rubicon: Independent security and inevitable welfare cuts

Published: 19 Mar. 2025, 00:03

An Pyeong-eok

The author is a professor of international relations at Daegu University.

The Trump administration in the United States has increasingly demanded that Europe take full responsibility for its own security. This threatens the very foundation of the North Atlantic Treaty Organization (NATO), which has safeguarded Europe for 76 years under U.S. leadership. Now, in the face of slow economic growth, Europe must prepare for self-reliant defense without American support. The answer lies in minimizing redundant expenditures and developing and deploying advanced weaponry through a coordinated European defense strategy.

Europe needs 300,000 more troops for self-reliant defense

Currently, about 100,000 U.S. troops are stationed in Europe. Under NATO’s operational plans, an additional 200,000 American troops would be deployed in the event of an attack on a NATO member state. To achieve self-reliant defense, Europe must increase its troop strength by 300,000. This necessitates not only bolstering air defense systems but also developing and procuring cutting-edge weaponry, requiring a significant increase in defense spending.

A report by the Brussels-based Bruegel think tank, released in late February, estimated that European defense spending, currently at 1.8 percent of GDP, should nearly double to 3.5 percent. NATO members have already pledged to allocate 2 percent of their GDP to defense.

Plans for Europe’s rearmament were outlined and tentatively agreed upon at an EU summit on March 6. Over the next five years, the EU will allocate 800 billion euros ($875 billion) to enhance European security. Of this, 150 billion euros will be raised through the issuance of Eurobonds, while the remaining 650 billion euros will be sourced from structural funds — originally intended for underdeveloped regions — and by expanding capital markets to encourage private sector investment.

From left, Britain's Prime Minister Keir Starmer, Denmark's Prime Minister Mette Frederiksen, European Union foreign policy chief Kaja Kallas, French President Emmanuel Macron and Poland's Prime Minister Donald Tusk attend a dinner at an EU summit in Brussels, Feb. 3. [AP/YONHAP]

Funds raised through Eurobond issuance will primarily be used to support Ukraine, including joint procurement of missiles, artillery shells and drones. The European Commission, acting as the EU’s executive body, will issue long-term bonds in the international financial market, backed by the EU’s strong credit rating.

Alongside EU funding, individual member states will also need to increase their defense budgets. To facilitate this, the Stability and Growth Pact’s fiscal constraints will be relaxed. Under normal circumstances, EU nations using the euro must keep their fiscal deficits below 3 percent of GDP. However, defense spending increases will be granted an exemption from this rule.

Unlocking fiscal constraints: Doubling defense expenditures

Two days before the EU summit, Germany announced an economic stimulus package of nearly 1 trillion euros, with half the funds allocated to defense spending. As the EU’s largest economy, Germany has adhered to a balanced budget rule enshrined in its constitution since 2016, limiting federal debt to 0.35 percent of GDP, effectively mandating fiscal balance. Following the outbreak of the war in Ukraine, Germany applied an exemption to this rule to increase defense spending by €100 billion by 2028. Additionally, Berlin plans to establish a 500 billion euro infrastructure investment fund to develop transportation and communications networks over the next decade.

For defense spending, Germany will apply a budget rule exception once expenditures exceed 1 percent of GDP — equivalent to 45 billion euros annually. As a result, Germany’s defense spending is expected to rise from the current 2.1 percent of GDP to 3.5 percent within three years.

German Chancellor Olaf Scholz attends a press conference after a European Union leaders' special summit to discuss Ukraine and European defence, in Brussels, Belgium on March 6. [REUTERS/YONHAP]

Following last month’s early general elections, Germany’s Christian Democratic Union (CDU) and Christian Social Union (CSU) — which emerged as the largest parliamentary bloc — are negotiating a coalition with the Social Democratic Party (SPD). The parties have reportedly agreed to revise the balanced budget rule. CDU, once a staunch defender of fiscal discipline, has shifted its stance due to Trump's exclusionary approach to Europe. On Feb. 12, after a phone call with Vladimir Putin, Trump initiated cease-fire negotiations between Russia and Ukraine — without involving Europe.

Friedrich Merz, CDU leader and a strong contender for Germany’s next chancellorship, acknowledged this shift in a post-election speech, stating, “Europe is waiting for Germany to take the lead. We must strengthen European integration as quickly as possible to achieve true independence from the United States.”

Leader of the Christian Democratic Union of Germany (CDU), Friedrich Merz, center, a candidate for German chancellor, delivers an address at the headquarters of the CDU in Berlin, on Feb. 23. [YONHAP]

Now, Europe’s independent security strategy has passed the point of no return. Nearly doubling defense spending is inevitable, but ensuring these funds are allocated efficiently and proportionately across the continent is crucial. The European Commission estimates that up to 100 billion euros is wasted annually due to the lack of joint procurement and development programs. For example, the cost of developing Germany’s Leopard 2A8 main battle tank exceeds that of the American Abrams tank by more than 10 million euros and is nearly 13 times higher than its Chinese counterpart. A joint development effort among Germany, Spain and France could significantly reduce these costs while also creating economies of scale by ensuring multiple EU countries adopt the tank as their main battle vehicle.

France and Britain possess strategic nuclear arsenals, but their combined capability amounts to less than one-tenth of that of the United States. While they cannot fully replace America's extended nuclear deterrence, even France — historically reluctant to discuss sharing its nuclear weapons — has now agreed to strategic talks on potential European nuclear sharing.

Trump’s America has not only accelerated Europe’s independent defense capabilities but also deepened its fiscal integration. Yet, the classic “guns versus butter” dilemma remains. While the surge in defense spending may marginally boost economic growth, inevitable cuts to welfare programs loom. Given the current era of slow economic growth, few politicians will advocate for tax hikes. Meanwhile, public resistance to welfare reductions is expected to be fierce.

Translated using generative AI and edited by Korea JoongAng Daily staff.