Germany recently passed legislation that purports to commit €1 trillion ($ 1.08 trillion ) to the defense sector, while the EU has suggested a Rearm Europe Plan to raise more than € 800 billion ($ 866 billion ) for defense.
On the surface, it appears as though Europe is getting ready for the next battle, but the reality is that it is actually trying to cover up its severe economic issues by investing money into its economy and building weapons. But will this approach job?
At various degrees, problems exist.
The first is financial. The idea that human factories may be converted into weapons production facilities, mainly tanks and armoured fighting vehicles, is at the center of the planning. For instance, the German company, Rheinmetall, is considering purchasing a Volkswagen factory in Osnabrück, north Germany, a facility that then faces an uncertain future.
The government of Italy has promoted a similar concept, urging Stellantis to begin producing protection equipment in its auto factories.
Stellantishttps: //www next month. reuters.com/business/autos-transportation/stellantis-italy-output-falls-475090-vehicles-2024-cars-lowest-level-since-1956-2025-01-03/ produced fewer than 500, 000 vehicles in Italy ( Fiat plus Alfa Romeo, Maserati, Lancia ) compared with 751, 000 in 2023. The bank’s lowest number in Italy since 1956 was 2024.
The president of Stellantis, John Elkann, objected to the government’s request to change some factories to protection production, claiming that his company was unsure that the “dead industry” would be the future of the car.
The main issue is that the economic justification for switching from high-volume creation to low-volume defense equipment makes little sense in the business world. Although it is true that some vehicles companies that produce trucks and other large equipment have cranes and lifts that could be used to build armoured vehicles, also tanks, these plants are designed for mass production rather than primarily for hand-built result.
The US stopped most car production during World War II ( aside from the necessary vehicles for the battle ) and switched to defense manufacturing. The US production was remarkable: 297, 000 plane, 193, 000 ordnance guns, 86, 000 tank and 2 million vehicles. The US merely produces 250 fighter jets annually today. That would equal a total production of 1,250 planes in a five-year issue like World War II, which would not compare to World War II’s.
Europe currently produces no more than 50 war tanks per year. Even though that figure is pretty low, it may take years to change an car factory to tank production, so the tank production in Europe doesn’t significantly increase over the next five years. Additionally, converting a manufacturer to military hardware requires a significant redesign of an automobile factory. Although Germany’s labor unions would have a lot to say about job rates, settlement, and social advantages, less people would also be required.
In the US, Europe, Russia, or China, it is obvious that the World War II design, which called for a federal participation to fight the war, is not feasible.
It is also important to point out that the security industry in Europe is divided, its supply chains are uncertain, and, in many cases, severely cheap, and that participating companies are not known for reliability or cost usefulness. Many of these businesses have grown as a result of wings transfers to Ukraine, where they receive the highest compensation. Where will the extra projected production get, if the conflict ends, if at all?
More military equipment does require more troops and support as a result. How this will become accounted for is currently unknown. Without enlistment, the force structure of Europe won’t be easy to grow. According to some, Europe is currently experiencing a crisis in defense selection.
Both the German and Italian cases are intended to solve financial and employment issues and in some way resurrect the German and Italian economy. However, in reality, the concept looks more like a rebate program to keep plants running, but with significantly lower output.
Both nations will have to determine whether or not they can manage the grants, whether or not they will contribute to resolving the country’s economic crisis in Italy or Germany, which is currently in decline. The solution to car selling is not to manufacture weapons, as the Stellantis CEO suggested.
One wonders if a major study has examined whether it makes sense to convert existing companies to war-making in the middle of the night or even if massive grants are going to help alleviate Germany’s and other countries ‘ economic woes.
The social issue is of course.
There isn’t a discussion on the strategic objective of the investing, despite the proposed ramp-up in defense spending in Germany and by the EU’s proposed plans to benefit defense companies that can use the new funding. In reality, there is a different political divide between some EU member states. This is a significant factor in Italy’s opposition to the EU Rearm Europe program, which was opposed to the European Commission’s president, Ursula von der Leyen.
Guido Crosetto, Italy’s defence secretary, sent an , open text that was published in Corriere la Sera, Italy’s most read newspapers.
Crosetto argued that Western defense” cannot change NATO nor provide the same level of protection.”
He explained that without the consent of all EU members, the EU may impose a popular defense strategy for Europe.
The EU Treaty itself gives the option of a typical defense scheme, but only after a unanimous vote of the German Council, which has never occurred or is currently being discussed in any state or member state.
The EU command has been pushing for a security function outside of NATO and has long intended to take its place. The EU’s Rearm Europe strategy has been put on hold due to Italy’s resistance to these interests, at least for the moment.
Uncertainties
The overall strategy to increase protection spending lacks any resolerable strategic justification. What kinds of forces are required for Western protection? Which industries demand the most capital? Additionally, even though everyone is talking about doing so ( as they have for the past 50 years ), there is no real strategy to consolidate German defense production in any significant way.
Additionally, it’s uncertain whether the promised funds will be provided by the Bundestag or any other European legislature.
The main strength of German law is that it makes it simpler to lift defence costs without subjecting them to a constitutional ban on budget deficits greater than 0. 35 % of the GDP. According to reports, the recently passed policy includes a constitutional amendment that removes the defence spending cap.
That is a likely significant step, but with an already depressed economy and little real growth in job from new investing, it will be difficult to maintain social support for large defense budgets in Germany or elsewhere.
Germany may also try to recoup its lost business in Russia if the conflict in Ukraine is resolved. Additionally, there is the spectacular probability that Germany will once more attempt to purchase less expensive gas from Russia, even renovating existing natural gas pipes, such as Nordstream. A shift in the way European industrialists view things might be able to halt the effort to boost defence output.
State aid programs, yet those costing €1 Trillion, must become based on a clear security plan, which Europe does not have, and on an understanding of the financial consequences, which may not produce anything like what appears to be promised. The verdict on Rearm Europe is still out.
Former US deputy undersecretary of defense for policy, Stephen Bryen is a special correspondent for Asia Times. This Substack newsletter, Weapons and Strategy, originally published as an original article in his Substack, is republished with permission.