OPINION: Europe’s Triple Shock Demands a Triple Bazooka

Europe’s triple challenge requires a triple bazooka in response.

If Europeans have finally not just heard the wake-up call but actually got out of bed – and that remains a big if – it will be because of the cumulative impact of three geopolitical shocks:

The Putin shock. Having made multiple prior aggressive moves and meeting no effective resistance from the West, Vladimir Putin launched a full-scale invasion of Ukraine on Feb. 24, 2022, beginning the largest war in Europe since 1945. And he stepped up the hybrid war he is waging against the rest of Europe.

The post-Western world shock. After 2022, we, in what was then still the transatlantic West, discovered that there’s a whole à la carte world of great and middle powers out there – China, India, Turkey, Brazil, South Africa – who are quite happy to go on doing business with Russia, despite the fact that it’s waging a brutal neo-colonial war. Thanks to four decades of globalization, they are now rich and powerful enough to counterbalance the transatlantic West.

The Trump shock. A long-term trend of declining US interest in and commitment to Europe is turbo-charged by the personal (mis)behavior of Donald Trump. (Never underestimate the role of the individual in history.) He is effectively trying to bully Ukraine into capitulating to Putin’s demands while also putting in question an 80-year-long US commitment to the defense of Europe.

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Meanwhile, a White House statement confirms that the US has pledged to assist Russia with agricultural exports.

A remarkable new opinion poll from the Franco-European magazine and think tank Le Grand Continent suggests that it’s not just our leaders who have finally woken up and smelled the gunpowder. Amazingly, 50% of those asked in the Netherlands and Belgium, 48% in France, and 43% in Germany and Spain say that it is now urgent for the European Union to increase spending on defense to 5% of GDP.

Yet the poll also shows big differences between European countries in the perception of the Russian threat and readiness to counter it by increased defense spending. The point is nicely made in a widely circulated graphic which plots the correlation between distance from the Russian frontier and current defense spending.

What almost no European electorate (with the possible exception of those in the Baltic states and Poland) is prepared to do is to see expenditure on healthcare, social services, or education cut, and/or major tax increases, on the scale needed to fund that rapid increase. Clearly, national defense spending has to rise, from 2% to 2.5% to 3% and upwards, and that will involve some painful choices, but in our short-termist national democracies, with their diverse and fluctuating threat perceptions, that process will take years.

If Europe is to do what is needed to save Ukraine and defend itself, and fast enough, it therefore needs other large sources of readily available funding.

Here are the three bazookas:

The German bazooka. This was authorized this week by the German parliament, thanks to the bold initiative of the incoming Chancellor, Friedrich Merz. It’s potentially up to €1 trillion, split between spending on infrastructure and defense. Germany is the only major European economy with the fiscal headroom to do this, and it’s the most important news of concrete action in Europe so far.

The Russian bazooka. Confiscate the roughly €230 billion of Russian frozen assets under European control. Use them to support the non-military budget and reconstruction of Ukraine over the next few years. That would be legal, legitimate, and just.

The Brussels bazooka. Shared EU borrowing for defense spending (broadly conceived) on the scale of the Covid resilience and recovery NextGenEU fund, i.e. some €750-€800 billion. North European fiscally conservative states like the Netherlands, and traditionally Germany and Finland, are still deeply reluctant to see this happen again, but understanding of the unprecedented geopolitical imperative created by the triple shock is spreading fast.

These three bazookas together would give Europe in the order of €2 trillion without hitting any voters so hard where it hurts that they revolt against it in the next national elections to come along. It would also be a big Keynesian boost to our struggling economies. (Of course, the next huge challenge would be to spend it well.)

So far we’ve only fired one of them – thank you, Germany. But it needs all three. Triple shock demands triple bazooka.

I spent three days this week in an impossibly beautiful springtime Paris, doing interviews , etc. for the French edition of Homelands – the 20th to appear so far – published by the wonderful Editions Stock.

The French reaction to the final blow of Europe’s triple shock, the Trump/US blow, is a fascinating mixture of horror and delight. The sentiment “We told you so!” is never far from the surface, perhaps especially when talking to les Anglo-Saxons. And as I wrote last week, they definitely have a point.

What France doesn’t have is the necessary money (although you wouldn’t notice the lack of it in the more prosperous parts of Paris). As one very distinguished French journalist put it to me: “We’re broke.” But if the famous Franco-German motor (German metaphor) or couple (French metaphor) is to be restarted/revived, it can’t continue to be the case that all the big words come from Paris and all the big spending from Berlin.

Reprinted with the author’s permission from his History of the Present blog. See the original here.

The views expressed in this article are the author’s and not necessarily those of Kyiv Post.