Europe faces a painful adjustment to higher defence spending
The choices: taxes, cuts elsewhere, more borrowing
With vladimir putin issuing threats and Donald Trump musing about withdrawing support, everyone agrees that Europe needs to spend more on its armed forces. What is less widely recognised is how wrenching the shift will be for a continent that has grown used to outsourcing its defence to America. Over the past three decades, politicians have enthusiastically spent the peace dividend on everything bar pilots, sailors and soldiers (see chart).
This article appeared in the Finance & economics section of the print edition under the headline “A shadow falls”
Finance & economics February 24th 2024
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