Europe's Unrealistic Defence Plans and the Coming Chaos.
America will make a deal with Russia and China, and Europe will suffer the consequences as it begins to awaken to defence realities.
European Commission President Ursula von der Leyen has announced a “Rearm Europe Plan”, seeking to encourage more spending on defence by issuing EUR150 billion in EU-level loans for defence procurement and allowing EU members to spend an additional 1.5% of GDP, equivalent to EUR650 billion, on defence without breaching their Stability and Growth Pact 3% of GDP deficit ceiling. This is to take place over four years.
For its part, intermingled with the above, Germany agreed to a EUR500 billion infrastructure fund, that will include defence, along with a debt brake suspension to allow defence spending to exceed 1% of GDP. This may boost the total spend beyond Von der Leyen’s announced EUR800 billion (assuming other countries do indeed boost defence spending).
We will explain why this is insufficient and unrealistic.
First, let us begin with a prediction: we are approaching a major shift in strategic thinking, from delusional liberal idealism to hard-nosed realism, with the Europeans being the last to awaken to this reality.
The Americans are getting ready to acknowledge that the unipolar moment is over. To ease the transition to a multipolar world, the Americans will likely make a deal with Russia and China, over Ukraine and Taiwan respectively. And America will cause major instability in Europe to consolidate over her. This may include a full withdrawal from NATO.
Deal with Russia
Trump is keen to separate Russia and China, and for obvious reasons: Western sanctions, naivete, weakness, and chest-thumping led to China gaining a monopsony over Russian natural resources and a monopoly over industrial exports to Russia. Allowing China’s manufacturing beast to access Russian resources at a discount, while these resources still get sold to the West at a premium was always a bad policy.
Our view is that a deal with Russia may be deeper than just Ukraine: it may extend to Georgia, Armenia, the Baltic States, and the Balkans, reinforcing Russia’s traditional sphere of influence. Other than countering Russia, America has no strategic interests in those regions. And, as Russia expands its influence, it will naturally be confronted by other powers, such as Turkey, Iran, China, Poland, and Germany. The US will play a balancing role, rather than a lead role, in these confrontations. To achieve a reconciliation with Russia, the US under President Trump may even withdraw from NATO: already, Trump is narrowing the definition of Article V, the collective defence obligation, in a way that foreshadows such a development.
The New, Old, World Order
Deal with China
Unlike Russia, which can be a natural resource supplier to America and needs American investment, China is a major commercial competitor. Regardless of political theory, we live today in a mercantilist world. Therefore, a deal with China will be much more limited, and focused solely on Taiwan, and perhaps Chinese and Muslim southeast Asia. While the US will likely trade freely with Russia, it will very evidently restrict trade with China quickly and severely. More critically, as we have explained in the piece below, America will work on building up Russian, Japanese, and South Korean collaboration to check China, and on opening the Arctic for trade between the US and Europe on the one hand and northeast Asia. The US will likely sanction China severely after if it peacefully takes Taiwan, as it separates American and Chinese supply chains.
The Trump Doctrine
Europe’s troubles
Europe lacks a competitor to TSMC or Intel that can produce chips. It has no analogue to Starlink to provide military communications. It has no indigenous fifth generation fighters or bombers. It has no competitor to Mach Industries or to Anduril or to Palantir. Europe is very far behind on defence technologies, behind countries like Russia and even Turkey.
Between them, all European states have a grand total of three aircraft carriers. Two of those are British, and, when these two new carriers were needed to support the US against the Houthi in the Red Sea, they turned out to be inoperable. With Europe having exported its technology and industrial capacity to China, and with China eating Europe’s export market share globally, Europe is in no position to ally with China: China got what it wanted from Europe, and it is unclear what Europe can offer without harming its industries further by compromising what remaining technologies they have.
Crucially, Europe cannot afford to defend itself. It is in the tragic position of being rich in assets, poor in income, and weak. Britain’s debt to GDP is 101%, with a fiscal deficit of 4.4%. France’s debt to GDP is 114%, with a deficit of 5.5%. Italy 136% and 7.2%, Spain 104% and -3.6%, with only Germany being functional with 62% debt to GDP and 2.1% deficit. These economies account for the overwhelming majority of the European economy, and therefore will have to shoulder the bulk of defence spending. Critically, when unfunded pension liabilities are included, these figures simply explode, ranging between a total of 300% debt to GDP for Britain and Germany and a burden exceeding 500% for France, Spain and Italy. None of these countries has a government that is willing to drastically cut social welfare spending. Only Italy is willing to cut spending on illegal migrants.
More critically, it is not clear to European leaders what Europe is, and what drives men to war. Men fight for God and country. Yet European leaders are hostile to both. They view their countries as economic zones, not Christian nations, and their people as in need of being “enriched” by alien or hostile cultures who pose a bigger domestic threat than Russia ever could.
No European man worthy of being a soldier will fight for open borders, net zero, and transgenderism.
Commercial Implications
If the von der Leyen plan is fully implemented, which is unlikely, European defence spending will go from 1.9% to between 2.8% and 3.4% of GDP. Full implementation is highly unlikely without major spending cuts, with the public rightly expecting spending to migrants to be cut before other spending.
Cutting spending on citizens before migrants or those of foreign descent may drive more unrest among the public, similar to France’s Gilets Jaunes.
Cutting spending on migrants will drive unrest by the newly arrived ethnic communities.
Assuming that Europe’s latent communal conflicts do not break out, Europe still has major gaps in technology and industrial capability that limit its ability to field the kind of high tech weapons required to stand up to Russia, or even Turkey.
To fight an advanced adversary like Russia effectively, a country - or community of countries - requires high end communications integrated with satellites, jets, and networked drones, reporting to field commanders in real time to allow them to manage the war effectively.
Without the equivalent of Starlink and Palantir, the F-35, and advanced chips, Europe simply lacks the ability to field such an army. Without American backing, France and Britain would have struggled to take on Serbia, or Gaddafi’s Libya, on their own.
Critically, without a spiritually-backed national narrative, Europe lacks the ability to attract the manpower for an army that can challenge Russia.
Most importantly, America does not want full European autonomy. Rather, America wants to consolidate its control over Europe, as explained here:
For Ukraine, Europe’s increased defence spending means nothing. It will take, in a best case scenario, a decade of investment for Europe to be able to field the kind of intelligence assets and surveillance equipment needed to replace American intelligence, command and control, communications and surveillance assets that can replace America’s.
Without full US support, Ukraine’s full defeat will happen sooner rather than later.
