EU has announced a 650billion defense budget and that’s excl UK, Turkey, etc
Has the US awakened the sleeping giant?
- Thread starter Rams
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The billionaires absolutely should be taxed. In Germany, their effective tax rate is around 26% or so while the average person pays over 40%.
And what we witness in the US should tell all of us that unelected people getting too much power by amassing obscene amounts of money and therefore influence is the biggest threat to democracy there is. So lets tax the shit out of them and see what we need to do other than that when we've reduced their wealth to levels that are at least somewhat reflective of the value they created for society.
They should be taxed more, but actually doing it is likely to be a fruitless endeavour. A time and money sink that is unlikely to raise much if any additional funds. France had a crack at it, Norway does it, the UK is currently doing it. It backfired spectacularly in all.
And if we did it, how much does it raise? We need to find somewhere in the region of 500 billion dollars to fund defence. EU billionaire wealth grew by 150 billion last year. Let's say we up their tax to 40% and none of them leave, best case that's an additional 20 or 30 billion. Virtually irrelevant. Meanwhile the welfare spend is 5 trillion and growing at close to 500 billion a year.
I agree going after the super-rich is unlikely to raise significant extra tax revenue but it's probably necessary to keep the public on-side if you want to simultaneously cut public spending on welfare or raise taxes on ordinary people.
Right now, 440 billionaires in the EU hold €2.2 trillion. That's more than half of Germany's GDP. That's a system relevant amount of money and thus far too much power for such a small number of individuals. If you only tax their earnings, their wealth can't shrink and that should be the objective.
If you ask me, there should be no billionaires to begin with. Their very existance is undemocratic by nature. Going by that logic, we aren't talking about €20-30 billion but €17.6 trillion.That's more than the GDP of the European Union.
They spend about as much as China already (300bn).
Doubling that, or more than doubling that, is madness. Where is the money going to come from?
This is three times what Russia, in all out war production, spends. Here PPP absolutely matters in terms of cost of procurement, wages, and so on, but the figures touted are insane.
Europe has decades of underinvestment to catch up on though.
I unilaterally give that title to Portugal and the other three can suck on lemons.
Don't doubt it. It's just the proposal, one part of it, would require governments to spend potentially more than 3.5% extra of their government spending totals on defense. Or into some communal defense fund. 1.5% of GDP increase is what they said. You effectively double that to get the real figure (which is how much money any government spends relative to what its GDP is).
The same initiative says they can borrow 150 billion against EU securities. That leaves about 350 to 450 billion. As a one off expenditure you could just about see it happening but as a mandate for all states to make that above increase it is dead in the water whether it floats to begin with or not.
I’m not clear on the timeframe for the €650bn as Von der Leyen suggested it’s over four years…
It's reported to be up to 800 billion euros mobilized from the new joint borrowing of 150 billion + additional defense spending exempt from fiscal limits, which is quite honest
https://www.reuters.com/world/europ...-billion-euros-von-der-leyen-says-2025-03-04/
good times for defense industry here.
.40% over a few years for argument. That's close because we don't know the timeline/etc to 1% of real term spending alteration for each state (.80%~). That's not insignificant.
Now, the Irish could do it easily. There is a 60bn reserve fund. Just throw 10 billion of that into the pot and the Irish have basically assured their position regardless of the overall figure. Does every state have this windfall? I doubt it.
Ireland also has a precarious outlook over the next ten years with respect to whatever happens in computation broadly (not just AI but company HQs and so on). I don't see them moving in the short-term but you would be eager to diversify over the long term unless you're a complete idiot which many Irish politicians are. They make it all market friendly and it works for a time but then ignore the macro trends and are in position where the disappearance of three or four companies would, for a time, completely feck up the state. These companies have no incentive to leave as it stands but that might not be true in 10 years.
Anyway, Ireland can tap into that fund and avoid any actual cuts. But other nations, like Germany, or Spain/France/Italy, being that they are trillion dollar economies have to consider it a lot more. They don't have these funds at scale (they could easily have billions each, but that isn't going to cut it when your economy is 2-4.5 trillion ~ (across the big four).
Basically, they are saying increase the budget 1.2 trillion seven years ago (EU budget now) by 700billion.
1. Is this a once off (Catch up) expense? Or is it to continue?
2. What about the increases required elsewhere?
There's a lot. Someone just shat out a figure imo and wanted to test reactions of the markets and the people.
https://www.politico.eu/article/fra...ncrease-defense-spending-to-3-percent-target/
French economy minister directly addresses the Caf worries and pledges that increased defense spending will not be at the expense of social spending and that taxing the rich should be the way to go.
French economy minister directly addresses the Caf worries and pledges that increased defense spending will not be at the expense of social spending and that taxing the rich should be the way to go.
I share your concerns to a degree that clearly people are fed up with their situation in a lot of European economies. And the economy at large is stagnant (and actually declining in GDP per capita terms in many European countries).
Things rarely end well for countries that have to pile money into defence spending without accompanying economic growth. But at the same time, what alternative do we have?
Infrastructure.
Take a look at China. They have done something incredible. I see it in videos more than anything else but you hear about it and see it and it's top class infrastructure across the entire nation if maybe this or that city isn't up to par, generally, the entire nation is.
If you can find 700bn or whatever it is for defense spending you cannot pretend, in the future, or present, that the same could not be found for infrastructural improvements which also generate enormous amounts of jobs. Across the board, high speed rail, new energy economies, housing, healthcare, etc.
China has pumped trillions into this kind of stuff from what I can tell whereas the EU and US has let it crumble. Trying to maintain an impossible empire in a post-empire world imo.
It didn't necessarily happen this way but it's as if the US said "you deal with Russia -- your business" and we'll look after China. But the competition is more economic than it is military. Cyber with respect to each, with reasonable defenses, seems to me, a far better "bet". It's cheaper and that's likely (superstructural) where the "wars" (non-wars) are to be had.
What is the money going on. Air defense? OK. What else? What does Europe, the EU, I mean, which has only Turkey and Russia to worry about and one of these is in NATO (whether that continues to exist or not is irrelevant qua Turkey imo), actually need? It already spends 300 billion a year in defense. This is what China, with a higher economy, and population base, and threat status (consider their position re borders and the nuclear states around them which may actually go into some kind of problem in the years to come), spends. It is three times the Russian expense. If the EU spends their money poorly, then why ask for more to be spent just as poorly?
It has the second highest defense budget, collectively, on the planet. It's a farcical situation. The dominant narrative is leading the way but that is the monied interest narrative not the truth. I want counter proposals but in this space you rarely get them.
They don't rate us
There are so many incorrect statements in this post I don’t know where to start…
Start at the beginning. Or don't bother starting at all. Just my experience.
That’s an absolute disgrace. We have sent our military personnel to so many US lead conflicts the past 30 years and it’s a complete disregard of the human sacrifice of British human lives for Americans interests. Talk about being ungrateful..
The US military themselves aren’t going to stand for this.
In answer to your question of what Europe needs to target with greater defence spending, this article was posted in the other thread: https://www.bruegel.org/analysis/defending-europe-without-us-first-estimates-what-needed
I guess whether it’s worth the cost depends on whether you think it’s realistic we’ll potentially need to fight a ground war with Russia without US support. Personally, I think it is a realistic scenario and we should prepare for it now.
But even if you hope war will never reach our continent… hope is not a strategy.
But Realpolitik is. War from where? Russia won't possibly invade a NATO nation (this is the sine qua non of the Ukraine thread regarding rationale for why Ukraine ought to have been in NATO). OK. So how is it going to invade Europe?
Then you have Turkey. Which wants to be in the EU.
Pretending there is an enemy without rationale is not a strategy either, it's completely disingenuous discourse.
1. Russia is the threat.
also 1. Russia cannot even fully invade Ukraine.
2. Russia would never hit a NATO state.
also 2. the EU must spend a trillion on defense despite nearly all of it being in NATO.
This call for spending surely ends the rationale for Ukraine ever being in NATO or NATO ever being a deterrent for Russia? Otherwise, someone please explain the contradiction. Even if there were no NATO, there is a nuclear armed state in the EU. And all of this presupposes that Russia has the means or the want to invade the EU. It doesn't have the first and if they're as calculating as people think then it won't have the second.
The simultaneously weak and strong enemy. An old tactic.
I’m no longer prepared to put all my eggs in the NATO basket. I could imagine America pulling out of the alliance in the next few years.
Still a nuclear deterrent with France. And the UK seems more than happy to lend their armies to the cause. So two states with more than enough nukes to deter. I don't see it.
Europe already has the infrastructure to produce arms on a massive scale, how many time does this need to be repeated?
Europe produces some of the World’s most technologically advanced arms, it’s why for example the Saudi’s and Israeli’s keep buying these arms.
China has spent the past decades playing catch up to the West. Europe has some of the best logistic infrastructure in the World, and certainly the most extensive.
Finally, Europe currently spends about 1.9% of GDP on defence. That’s conicedentially the Worldwide average in 2024. Russia spends 5.9%, for example India 2.4%. China only 1.7%.
I think you’ve misunderstood the nature of the nuclear deterrent. Neither France nor the UK will launch nukes the day Russian troops set foot in Estonia, for instance. We’re not going to choose to end human civilisation that easily, and our nuclear doctrines do not require us to do so.
There’s a reason the US has military bases in Europe and NATO has detailed plans about how to fight a ground war against invading Russian forces. The concern is that European forces are presently incapable of repelling a sustained Russian attack without US battalions and support functions.
That said, war games simulations do tend to show that a war between Russia and NATO escalates to all-out nuclear exchange and the apocalypse over the course of weeks/months. But that’s based on a US-backed NATO.
I don't mean their capacity to manufacture weapons, I mean their entire infrastructure moving toward a new a century.
Yes, they do. That's not what I said.
Its social contract is falling to pieces qua social mobility. At a macro scale, it is beyond fecked up. And it's been getting worse.
Collectively they spend 300bn which as I said is three times what Russia spends and the same as what China spends. Nominally.
Then they need to come out and say that. The US was never going to do that either.
What stops Russia from invading these nations is less NATO, imo, than it is the fact that they cannot invade these nations. There is no massive (or large portion, if not massive) Russian language community in these places and most are EU states.
What allows them to hold what they have taken is the linguistic-identity aspect. I'll argue that against anyone. Crimea was like 90% Russian speaking (or higher) and the areas it holds are not coincidentally the areas of the highest Russian speaking concentration. The difference between a war of WW1 style attrition (or whatever calque you want) and Vietnam is that in this war there is some kind of base not entirely (if many - or loads - do oppose) unopposed to a Russian control. It's not so "foreign" as the US putting a million troops in IndoChina.
For example, if the Russians used a battlefield nuke the US isn't going to respond as Obama said because the Russians have border escalatory dominance. This is not true beyond its borders. The Russians could run up the nuclear chain to Lybov for example and no US president in history is going to put New York on the table for that. This is what that escalatory dominance means. But it is restricted to their border lands.
The EU puts troops in Ukraine. The Russians say "OK, let's use a battlefield nuke". The EU says, let's do the same. The Russians use an actual nuke (largescale in a middle sized city). There is no response after that. Because London, Berlin, Paris, and New York will never be put in danger in this scenario and this is well known and has been for a long time.
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Reading the way that's worded, defence could be quite a broad term. If we're really heading into a world where we need that sort of budget I suspect some of it would go into chip manufacture, tooling, and other self sufficiency industrialisation. The US realised it a few years ago, and we've probably decided Europe needs to do the same.
The only way to compare spending is to do it via GDP, otherwise it’s comparing apples with pears.
Where are you from?
Europe, with exceptions such as Albania and Moldavia, is mostly made up of modern wealthy nations with a very high infrastructure and standard of living. It’s main challenge is posing a unified front, not that it doesn’t have the money, infrastructure or technology. For Europe’s it’s very much the question of ‘does it have the will ?’. Not that it can’t.
The way to compare is to take all EU states and figure out the nominal defense expenditure which takes GDP into account anyway. And that figure is 300bn. Second highest expenditure on the planet.
Various places. But living in an EU nation. Unlike the UK which is why I'm vexed at the idea that the UK is helping to push an austerity narrative when it is the average person in the EU which is going to suffer for something that hasn't been properly lain out.
Also, GDP is not right. It's the percentage of all monies spent by nations not their entire GDP. This is a far better metric (when you use both). The US has a 13-15% (maybe a lot higher by hidden expenses) bill when it comes to all the money their government spends on everything on defense alone. This hints to a highly militarized nation, which is exactly what that nation is. But at GDP you wouldn't get that nuance.
Most non-empire nations spend (let's use the EU) a fraction of that. And that is reasonable. The US keeps company with perpetually war-torn nations with that percentage of overall expenditure. It's why its infrastructure, too, is crumbling. Worse than the EU on about every metric but it's a constant political choice which they make.
Some would have the EU make that same choice. I'd rather dissolve the union. In any "either/or" scenario. If nuanced, one off, expense, to "catch up", we're in different territory. That can be reasonably done like the NHS distinction. The Tories touted higher expense year after year but in real terms they were just falling behind inflationary metrics. If you make this distinction and say "borrow" (which has been said) y amount for x years and not issue a dictate to states perpetually, it is something else.
Ok, this is the crux of our disagreement then. I think it's NATO's — and largely America's — genuine military capability that acts as a deterrent to expansionary Russian aggression in Eastern Europe.
No, it's been consensus military opinion for a long time that a limited nuclear exchange inevitably escalates to a full-blown nuclear war. This is a really eye-opening article that it's worth taking the time to read: https://www.nytimes.com/2024/12/02/magazine/nuclear-strategy-proud-prophet.html
If nukes start landing on "mid sized European cities," it's game over for humanity, in my opinion.
Read Obama's commentary.
I mean if the Russians hit Ukraine with a battlefield nuke not Poland. There's no chance the EU/US is willing to go to full scale nuclear weapons at that point where they exchange London for a town in Ukraine, not to be disrespectful, no one outside of Ukraine or the border areas (or historians, etc) has ever heard of.
This has been consensus for more than a decade.
Not in Ukraine.
1. Russia uses battlefield nuke.
2. If response, then Russia
3. uses a larger nuclear weapon.
4. You either respond (at Moscow) or simply leave it alone.
I'm not talking about Poland or any of these nations, but the Ukrainian scenario.
Which is what you have seen with Trump lately. The simple fact which Obama said many years ago now (from intel heads not from thin air).
Border dominance and most of this with respect to the likes of Georgia and Ukraine, etc. Not NATO nations.
The EU (France) and the UK don't have any battlefield nukes, for a start.
It's not about that, but about the chain of escalation. It's war-game theory. Russia will go all the way up that ladder (on its border) but the EU (NATO) will absolutely not. It would be different if it were Warsaw.
If we station troops in Ukraine and Russia nukes them, all bets are off, I'd have thought. Which is why I'd be very reluctant to put boots on the ground from any NATO countries.
I don't think the Russians would let those troops be there sans an official peace deal which is iron-clad. It would escalate before they arrived. And if there, they'd just go elsewhere to make the same message (where those troops aren't).
It isn't going to happen without an absolutely iron-clad peace-deal. And even then it's not certain. It would always (if at war) result in a backdown from the EU nations. However much they protested they would not respond in kind.