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Europe has focused on the climate crisis and ignored military threats to it. By freeing up the economy, both needs can be met.
While the climate crisis has long been considered a serious threat and prompted trillions of dollars of investment in the green economy, Europe now faces another pressing concern: the threat of war. For now, this looming specter emanates primarily from Russia, but the continent is also grappling with challenges arising from development and conflict in its south, which could necessitate intervention in Africa and the Middle East.
To deal with these threats, Europe needs to strengthen its defenses, an aspect that has been severely neglected for at least the past 40 years. Initially ignored for convenience, this position has since undergone a significant change as it has been seen as the responsibility of the American people.
To prevent Europe from becoming a war zone, we must prepare for conflict in advance. As the Romans wisely said, “If you want peace, prepare for war.” Building a reliable defense will require significant investment, exceeding another 1 trillion euros over the next five years. , this amount is currently out of reach.
inefficient state intervention
European politicians, including German Chancellor Olaf Scholz, who has continued to delay arms deliveries to Ukraine, recently recommitted to spending 2% of gross domestic product on defense. This effort is inadequate given the existing backlog of security needs. The effectiveness of such expenditures depends largely on their allocation.
Consider Turkey. In addition to maintaining strict military standards, the country has also developed a robust defense industry, excelling in drone technology and producing its own fighter jets with stealth capabilities.
In Europe, technocratic approaches are increasingly being adopted, as evidenced by the proliferation of regulatory and fiscal policies that reduce market influence in favor of government intervention, both at national and trade union levels. This trend is further highlighted by the increasing tax burden due to the expansion of state institutions and the expansion of the subsidy system.
Learn more about European defense
They work in tandem as countries and the European Commission use subsidies to “guide” (in other words, manipulate) their economies. Despite claims to the contrary by confident technocrats and politicians, state ubiquity is not inherently beneficial and often results in inefficiency and misallocation of resources.
Special projects are financed through so-called “designated assets,” which amount to debt and ultimately burden future generations with increased taxes and inflation. Europe’s fiscal system is already reaching its limits, both at national and union level, despite trillions of dollars earmarked for the green economy.
While supporting a green economy is laudable, projects often adhere strictly to arbitrary parameters and bureaucratic standards, fostering waste and inefficiency akin to the Soviet Union’s five-year plans. Businessmen do not invest much in this system, and when they do, they expect to receive grants and grants rather than to create the most viable ventures.
Promote business-friendly change
Fortunately, there are many solutions. Making the defense and environmental sectors attractive to private investors requires less regulation and a more market-driven approach. Realistic environmental standards and clear defense requirements, coupled with deregulation and favorable tax policies, can foster innovation and job creation.
To some, this may sound revolutionary. It is important to overcome entrenched technocratic and bureaucratic mindsets. Doing so could unlock significant economic potential in both the defense and environmental sectors, strengthen the job market and foster innovation.
The imminent threat of war could encourage a transition to greater prosperity and freedom by discouraging state intervention.
The imminent threat of war, combined with the need for change, can encourage a transition to greater prosperity and freedom by curbing state intervention.
Europe has a strong base in the defense industry, but past investments have been hampered by insufficient budgets and strict export controls. Criticisms about insufficient ammunition production overlook the imprudence of such investments at a time when domestic demand is lacking and export opportunities are limited.
Additional barriers to defense investment include hypocritical regulatory standards and reputational concerns within the financial industry that discriminate against defense involvement.
Europe faces growth and productivity challenges primarily caused by too big a government. The current crisis presents an opportunity for change. Historically, threats have often triggered necessary changes.
Failure to seize this opportunity risks further economic decline and heightened security risks. Peace and prosperity require preparation for war.
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