Defending Europe: how to fund and organise European defence and prepare our societies

Defending Europe: how to fund and organise European defence and prepare our societies

Defence: Capabilities, Financing, and Industrial Strength 

European defence spending growth has been driven by the strategic threat posed by Russian aggression, rising geopolitical tensions, and a US administration less willing to provide military support for European security. At the recent NATO summit in The Hague, leaders agreed on a new spending target of 5% of GDP, with 3.5% to be spent on military capabilities and 1.5% on non-military but defence-related areas. Europe’s emergence as a key driver of global defence spending growth masks considerable heterogeneity, with some countries doubling, trebling or even quadrupling spending whereas others, notably in southern Europe, have not matched this pace. Even some of the strongest spenders such as Poland are likely to struggle with the sustainability of spending growth in the future. While Germany has recently excluded defence spending from its debt brake and is able to finance the increase, most other countries are in a much tighter fiscal situation. In the long-term, the combination of increased national debt, higher defence spending, inflationary, demographic and welfare pressures, and climate-related costs will require tough political choices. 

It is imperative that Europe not only increases its defence spending but also ensures these funds are allocated sensibly and invested in "the right stuff" that meets current as well as future threats. Defining these essential military capabilities to enhance European security is paramount. Furthermore, Europe must significantly boost its defence industrial capacity to meet rising demand and reduce critical external dependencies. This necessitates a concerted effort to enhance cooperation, transitioning from fragmented national efforts to cohesive multi-national initiatives, particularly in overcoming persistent procurement fragmentation. How can procurement processes move from a peace to a wartime mindset? How can the surge in investment enhance military readiness, accelerate technological advancement, and improve interoperability across European armed forces? How can political unity within the EU and NATO be managed to ensure and enhance its collective strength? 

Economy: The Defence Dividend 

Increased defence spending should not be viewed solely as a cost, but as a strategic investment capable of contributing to broader economic growth, prosperity, and security, representing a genuine "defence dividend". Defence research and development which has often led to breakthroughs with wider civilian use can be strategically leveraged to drive innovation across various sectors. Investing in defence should also drive workforce development, but this will compete with areas such as the energy and technology transition, which could hinder scaling-up. Scaling also requires a manufacturing base many European nations currently lack. Given existing labour shortages for skilled workers in many European countries, how can we (re)train our labour force for an expanding defence industry? What role do businesses and higher education play? How much can industry redirect civilian into military production capacity? Could defence investments also be strategically located to help revitalise economically challenged regions, creating invaluable opportunities for employment and attracting infrastructure development in areas that might otherwise struggle? 

Society: Civil Preparedness and a Whole-of-Society Approach 

Beyond military capabilities and economic strength, effective deterrence and defence in Europe will depend on civil preparedness and a whole-of-society approach. Without broad public engagement and societal buy-in, even the most robust military and economic strategies will falter. How do we explain higher defence spending to voters, especially if it requires cuts to welfare, health, or education spending, or increasing taxes? Maintaining broad public support under such circumstances requires clear, consistent communication about the imperative of security. In Germany and other European countries, populist leaders, both on the far-right and left, have exploited the public’s desire for peace, advocating disarmament and concessions to Russia which leaves large numbers of citizens sceptical of an imminent military threat. A much-quoted Gallup study from last year showed that willingness to fight has decreased across the EU. While some European countries never abolished conscription, others are currently considering reintroducing some form of military service and exploring boosting their reserves. How can military service and careers within the broader defence ecosystem be made more attractive to a new generation, ensuring a robust and willing workforce for future security needs? Many European countries are looking to Finland and Sweden’s total defence approaches to broader societal resilience, but every society must be seen within its own historic and geographic context. How do we effectively organise and foster civil preparedness and resilience across our diverse populations and societies?