Welcome back \u2014 it was a watershed moment for Germany and Europe this week.\u00a0<\/p>\n
Incoming German Chancellor Friedrich Merz took everyone aback when he said on the night of his election victory on February 23 that his priority was \u201cindependence\u201d from the US. On Tuesday, the Christian Democrat leader again surprised them \u2014 including the financial markets<\/a> \u2014 by hatching a speedy deal with the Social Democrats to rewrite fiscal policy<\/a> and allow Berlin to borrow hundreds of billions of euros for defence and infrastructure investment.<\/p>\n On Thursday night, EU leaders endorsed a European Commission plan to free up national borrowing for defence, a \u20ac150bn loan programme for building capabilities and other measures to support rearmament. But the EU\u2019s more indebted members may struggle to use the fiscal space theoretically afforded to them. Emmanuel Macron, the French president, said more would be needed, including large-scale common borrowing.<\/p>\n This makes Berlin\u2019s astonishing volte-face on fiscal policy all the more crucial. As one senior EU official put it, \u201cwithout Germany spending, there is no European defence\u201d. I\u2019m at ben.hall@ft.com<\/a><\/p>\n European leaders are having to adjust at incredible speed to a crumbling transatlantic security order that underpinned their defence for generations. In just six weeks, US President Donald Trump has turned from unreliable partner to antagonist to potential adversary.\u00a0<\/p>\n French-speakers might enjoy this we-told-you-so philippic<\/a> by Bruno Le Maire, France\u2019s former finance minister for Le Grand Continent. The US has \u201cspun out of control\u201d, he writes, and is threatening \u201cthe schism of the west\u201d.<\/p>\n The Trump administration seems hell bent on a peace deal for Ukraine that practically all European leaders bar Hungary\u2019s pro-Kremlin Prime Minister Viktor Orb\u00e1n fear will seriously compromise their own security. The US betrayal of Ukraine was laid bare this week when Washington suspended deliveries of military aid and then cut off intelligence-sharing with Kyiv. This will hamper the operation of air defences and long-range precision strikes. It shows the lengths that Trump will go to get his way and will have sent shudders through European capitals that depend on US military technology.\u00a0<\/p>\n Despite the martial statements from European leaders, many beyond Nato\u2019s eastern and northern flanks have yet to translate their concern into spending commitments. France, Italy and the UK in particular face some difficult choices in the weeks ahead. Italy was the most vociferous critic of EU fiscal constraints on its ability to raise defence spending. Now it has no excuse \u2014 as long as bond markets are accommodating.<\/p>\n Increasing defence spending may be the easy part. Given Germany\u2019s economic heft and its armed forces\u2019 focus on territorial defence, it should become the bedrock of European security. But as the FT\u2019s editorial<\/a> pointed out this week, Berlin still needs to acquire a strategic culture, a willingness to deploy military force and take risks.<\/p>\n Ronja Kempin of the German Institute for International and Security Affairs (SWP) writes<\/a> (in German) that the Europeans will also have to overcome fragmentation to turn greater spending into greater military power.<\/p>\n \u201cEach country operates largely independently, with its own procurement systems and armed forces that are hardly interoperable. Europeans still spend more than 80 per cent of their defence spending at the national level. This means they lack economies of scale. They get fewer capabilities for their money. National sovereignty reservations stand in the way of interoperability of the armed forces.\u201d<\/p>\n Nato has long tried to forge the interoperability of its members\u2019 armed forces. Now the EU has a panoply of measures to promote joint procurement and innovation in defence technology. Luigi Scazzieri of the Centre for European Reform provides an excellent overview<\/a> of the EU\u2019s ambitions in this field, as does this piece<\/a> from Clingendael, the Netherlands Institute for International Relations.<\/p>\n The good news is that Europe knows what it needs to do: implement the defence plans and fill the capability gaps drawn up by Nato. Commission president Ursula von der Leyen stresses that the EU\u2019s industrial efforts on defence must be aligned with these Nato requirements.<\/p>\n The FT laid out the challenges in this Big Read<\/a> last year. Torben Sch\u00fctz and Christian M\u00f6lling of the Bertelsmann Foundation provide a concise and lucid analysis of what Europe should do now in this piece<\/a> for the European Policy Centre on a \u201cEuropean way of war.\u201d<\/p>\n \u201cNato currently possesses approximately two-thirds of the capabilities required to implement the new regional defence plans. Without the US, this share drops to about one half.\u201d<\/p>\n Europe has to fill that gap as swiftly as possible, they write.\u00a0<\/p>\n That means investing in among other things: air defence; long-range strike systems; drones and anti-drone technology; and so-called ISTAR \u2014 intelligence, surveillance, target acquisition and reconnaissance.<\/p>\n Europe\u2019s vulnerabilities on ISTAR were underscored by the withdrawal of US of intelligence-sharing with Ukraine this week, but Sch\u00fctz and M\u00f6lling note the Europeans do have some capabilities in this domain.<\/p>\n Without the US, Europe would need to be able to field up to 120,000 men to stop Russia early in any evasion. Europeans would also have to replace American military leadership within Nato while retaining the tried-and-tested military governance structures of the alliance, they add.<\/p>\n The biggest challenge is how to substitute the US nuclear deterrent. Merz put it back on the agenda last month, saying he wanted to discuss how the UK and France could help Europe. The British deterrent is already there to protect Europe under Nato command, but is reliant on US missile technology and maintenance.<\/p>\n Macron said this week he was ready to engage on the issue (which delighted Team Merz) and he has set up a six-month review of the strategic and technical implications. But France\u2019s \u201cvital interests\u201d, which the force de frappe<\/em> protects, have had a \u201cEuropean dimension\u201d since Charles de Gaulle\u2019s era. It is hard to see how Paris could make that more precise without detracting from the \u201cstrategic ambiguity\u201d that underpins the country\u2019s deterrent.<\/p>\n The French and British nuclear forces are too small to replace America\u2019s.\u00a0But the fact that Donald Tusk, prime minister of Poland \u2014 one of the countries most attached to the US security guarantee \u2014 said on Thursday that the French proposal should be taken seriously shows just how the Europeans are now thinking the unthinkable.<\/p>\n Can Europe\u2019s defence groups step up if Donald Trump pulls back?<\/a> by Sylvia Pfeifer and Clara Murray examines how the continent\u2019s weapons manufacturers could benefit from a rearmament drive.<\/p>\n Hakan Fidan gives a rare interview to the FT \u2014 The ex-spymaster shaping Turkey\u2019s rise<\/a> by Andrew England and John Paul Rathbone<\/p>\n<\/div>\n\nAmerica\u2019s betrayal<\/h3>\n
Spend, Spend, Spend<\/h3>\n
A new umbrella for Europe<\/h3>\n
More on this subject<\/h3>\n
Read of the week<\/h3>\n
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