Europe must double defense spending after Trump's election - Bloomberg
Photo: Europe needs to double defense spending after Trump's election
Key European nations may have to double defense spending to meet the challenge of Russian aggression against Ukraine, as well as possible reduction of American support under Donald Trump's presidency, according to Bloomberg.
Bloomberg Intelligence analysts led by George Ferguson write that the 15 largest European members of the North Atlantic Treaty Organization may have to increase military investments by $340 billion a year, bringing them to $720 billion.
During his election campaign, Trump said he would limit US security relations with Europe, and during the NATO summit in his first term, Trump threatened to withdraw from the military alliance if the allies did not increase spending.
“Russian aggression has already spurred increased defense spending in Europe,” Ferguson wrote. “However, more may be required to support Ukraine, counter Moscow’s broadly aggressive regional posture and address deepening strategic competition with China.”
The report comes after former European Central Bank President Mario Draghi warned of “slow agony” in the European Union if member states do not act quickly to boost the region's productivity through additional investment. He said that Europe needs to expand its industrial capacity in defense to ensure that the region's fundamental values do not disappear.
According to the report, Europe urgently needs battle tanks, artillery guns, and infantry fighting vehicles for ground forces, as well as support aircraft such as refueling tankers, transport aircraft, and submarine hunters.
Analysts write that companies likely to benefit from the increased spending include Leonardo SpA, Airbus SE, BAE Systems Plc, and Rolls Royce Holdings Plc.
After decades of underfunding since the end of the Cold War, rearmament on this scale could take more than 10 years on the continent as contractor debt grows and aerospace and defense supply chains are already stretched.
However, the region's small defense industrial base is likely to be unable to provide everything needed in the short to medium term.
“Europeans may have to rethink some of their spending priorities, with a lot of their budgets already challenged, but the size of the threat is such that they can’t ignore it,” Ferguson said in an interview.
The EU views Russia as an ominous threat after its full-scale invasion of Ukraine. German Defense Minister Boris Pistorius warned this year that Russia could attack the NATO alliance within five to eight years.
The EU's candidate for the bloc's first-ever defense commissioner, Andrius Kubilius, echoed this prediction, saying the region needs to build up its military forces for a possible confrontation with Russia in six to eight years.
