Europe’s armed forces are rightfully being applauded for their efforts in limiting the disastrous effects of COVID-19, but the test of whether European militaries are truly valued will be measured over the next few years as pressure on defence budgets mount, write Daniel Fiott, Torben Schütz, and Marcin Terlikowski.
Daniel Fiott is a defence analyst at the EU Institute for Security Studies, Torben Schütz is research fellow at the German Council on Foreign Relations and Marcin Terlikowski is head of the international security programme at the Polish Institute of International Affairs (PISM).
The outlook does not look good as estimates show anywhere between a loss of about -7.5% to –12% in euro area GDP in 2020. On this basis, one estimate already predicts that Europe’s defence budgets may lose anywhere between $21 billion to $56 billion in 2020 depending on the scenario.
To put this into perspective, after the 2008 financial crash, NATO’s European allies registered a loss of less than $10 billion in their 2009 defence expenditure.
It is a sure thing then that in the coming years there will be less money for defence in Europe. What matters now is how deep the potential cuts will be.
It matters for the credibility of Europe, which has made numerous promises to its citizens that it would become a strategic actor, but which it has yet to fully lived up to.
It matters for Europe’s capacity to deter adversaries like Russia, which relies on its vast military capacity to coerce other nations.
It matters, finally, for Europe’s ability to prevent violent conflicts and humanitarian crises in its neighbourhood. More simply: it is about Europe safeguarding its interests and values and as a credible partner within NATO.
Hence, defence budgets should be “vaccinated” against heavy cuts right away, before the first signs of austerity appear. Only now, when governments are rolling out multi-billion stimulus plans and calculating necessary reductions in their spending plans, is it possible to ring-fence defence expenditures.
It is not easy to say how long the depression in European economies and thus defence budgets could take. After 2008, it took Europe about 6 years to reverse savage cuts but the increase in spending only occurred in 2014 because of Russia’s invasion of Ukraine. Now, Europe does not have that much time.
As simple as it may sound, the range of security challenges facing Europe today is broader and more complex by a larger order of magnitude than in 2008.
A revisionist Russia, failed and failing states in Europe’s direct neighbourhood, the menace of terrorism, the adverse effects of climate change, hostile activity in cyberspace, unregulated migration and a more assertive China all require Europe to step up its efforts in the international arena.
But you can’t do it without a credible military force underwriting your policies.
Industry-wise, the long-term implications of defence budget cuts in Europe cannot be overstated. Without the financial resources, there will be little room to support defence research or capability development, and this could lead to an erosion of Europe’s scientific, industrial and technological base – precisely the skills needed to ensure Europe’s resilience against all sorts of crises.
While cancellations or delays of modernisation efforts and equipment procurement will hurt the defence industry’s bottom lines in the short term, a lack of state investment in research and development will hurt their future export chances – and the quality of the future military goods available to Europe’s soldiers.
The exemplary performance of Europe’s militaries during the pandemic in delivering medical supplies, transporting patients, assisting civil authorities and providing hospitals may help with popular support to at least maintain current spending levels. Yet, seeing the military as mainly a tool to be deployed during public health crises can justify all sorts of budget cuts.
Why should governments invest in the next generation of stealth fighters when they are only required to transport patients to hospitals?
This is just one example of an approach that may harm defence spending in Europe.
The strength of militaries across Europe is that they know how to walk and chew gum at the same time – they can ensure deterrence and defence, engage in crisis management and deal with public security matters such as pandemics too.
They can only do so, however, with the right level of investment and equipment. With the number of existing threats facing Europe, now is the time to “vaccinate” the resources of Europe’s armed services, and thereby sustain the European level of ambition in security and defence area.