How to finance European defence? This is a million – or perhaps a billion – dollar question. If it remains unanswered for much longer, it risks toppling governments, deepening social tensions, and giving further momentum to the far-right. In Europe, the fault lines are unmistakable. Member states further to the west are reluctant to increase military budgets, given that their public finances are already under strain and sluggish economic growth in recent years has further narrowed their fiscal room for manoeuvre. In Western Europe, the war in Ukraine is, quite literally, a more distant reality, making it far more difficult for politicians to generate electoral support for higher defence spending.
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