Conceived as an alliance for peace, the EU has for decades taken its security for granted. But as Donald Trump casts doubt over the US commitment to support European allies, Heads of State are scrambling to bolster the defence capacities.
But is the rush to rearm just another error that will cost EU citizens for decades to come? Former Greek finance minister Yanis Varoufakis fears so. Speaking in at an event at The Merode club in Brussels last week, the economist famed for his acerbic criticism of austerity took aim at the call to arms.
On Friday, EU leaders signed the landmark 'Rearm Europe' plan, in which Member States commit to collectively spend €800 billion on defence. Commission President Ursula von der Leyen presented the plan as a matter of existential necessity in the face of "a clear and present danger". She weighed the security imperatives against the economic challenge of creating a European arms industry capable of supplying the continent, should it lose the backing of the US.
"We thought we could benefit from a peace dividend, but in reality, we created a security deficit. The time for illusions is now over," she said.
But later that day Varoufakis told The Brussels Times that the defence plan only proves how deluded EU leaders are. "Do you really think that Putin is shaking in his boots? No, he’s laughing his head off!" he said of the most ambitious collective approach to defense spending and procurement in the bloc's history.
Varoufakis isn't known to hide his views and has been scathing about the EU defence rush. Credit: Wikimedia Commons / Belga
Varoufakis – who is the co-founder of DiEM25, a pan-European leftist movement – described the EU's approach to defending Ukraine as the latest in a succession of misguided strategic moves that will weaken the Union. He highlighted the economic challenges that are weakening the social fabric in Member States and opening the door to right-wing populism.
"Europe sliding into irrelevance," he argued. To prevent the Union from disintegrating completely, the priority must be investment in industries that can bring lasting prosperity. And not only is Europe already too late to build an arms industry capable of fueling growth, Varoufakis sees this as a foolish enterprise from the start.
"Creating a defence economy then requires sustained conflicts," he warned, before pointing to the critical areas where Europe already has no foothold. In his eyes, defence is the wrong kind of investment. He painted a woeful picture of the EU as an economic weakling with none of the tech heavyweights that are clustered in the US.
None of the world's 50 most valuable companies are based in the EU – a fact that has made Europe subservient to foreign players. Added to which, the critical infrastructure that would allow the bloc to compete on this front, or at least claim some strategic autonomy, are still not seeing the investment they so obviously need.
"What about batteries? What about (micro-)chips?" Varoufakis asked rhetorically. Ever loquacious, he left these questions unanswered.
Beyond Belgium's means?
Known to the world as Europe's institutional heartland, Belgium itself is flagging far behind on its defence spending. Whilst NATO stipulates members must devote at least 2% of GDP to defence, Belgium has only managed 1.31% – around €8 billion.
It's a shortcoming that Prime Minister Bart De Wevern (N-VA) has vowed to address, pledging to pump an extra €4 billion into the sector every year. This would mainly go towards 14 new F-35 fighter planes, heavy transport helicopters, special forces aircraft, drones, and logistics equipment (trucks, mobile repair stations). But funds have also been allocated to create a voluntary military service for young Belgians.
But although most political parties in Belgium (notably not the workers' party PTB/PVDA) agree on the need for additional defence spending, the country's poor economic health is a major barrier to investment. Even with EU assurances that defence spending will be exempt from excessive debt procedures, maintaining a larger defence budget will require a sustained financial effort that Belgium will struggle to take on.
The Federal Government has proposed a "defence fund" that would be topped up with dividends from companies such as BNP Paribas and Belfius (banks in which the State is a shareholder) and with the sale of government holdings. But critics point out that these are only one-off revenue sources that do not provide a long-term solution to greater defence spending.
