2024-07-29 01:51:18
The 100 billion euros for the Bundeswehr will be used up in 2027. And then? The economist Moritz Schularick argues for a significantly larger special fund – and explains why we not only have to afford it, but can do it.
The election of the US president could have a significant impact on the continuation of the war in Ukraine – and thus also on Germany. What do we have to prepare for? How much money do we have to pay for our own security? And why do the Western sanctions against Russia seem to have little effect?
One person who is concerned with all of these questions is Moritz Schularick. The economist, who heads the Kiel Institute for the World Economy (IfW), warns in an interview with t-online against relying solely on the USA in the future. “Europe must grow up,” he says. And: Germany must spend far more on its own defense capabilities, temporarily even on credit.
t-online: Mr. Schularick, an exciting election campaign is looming in the USA. What outcome do you expect?
Moritz Schularick: For me, this is a conflict between hope and realism. But in any case, we must prepare ourselves for a President Donald Trump with a Vice President JD Vance.
What impact would this have on us?
That would have serious consequences for Germany. The decisive factor is the security dimension. And Trump’s nomination of Vance is a clear signal to Europe: Hard times are ahead of us and we have missed our preparation time.
Europe must grow up and take care of its own security. If Trump wins, he will soon stop aiding Ukraine and make a peace proposal that will probably not be acceptable to Europe. Then we will have to consider whether we want to continue to support Ukraine from our own resources. In my view, we should. And then it will be all the more important for us to strengthen the German army and European defense.
The special fund currently ensures that the troops are financed. However, from 2028 onwards there will be a gap of 30 billion euros in the financial plan. Is this serious budget policy?
No, the federal government is currently not pursuing a sensible budget policy for what the country needs. What’s more, the budget policy is and remains a security risk for Europe. Because it is a minimal consensus that maintains peace within the traffic light coalition at the expense of European security.
The Kiel Institute for the World Economy has been documenting aid for Ukraine for a long time. How much more would Germany have to spend on Ukraine if a potential US President Trump were to stop American payments?
The most recent aid package promised by the USA was worth around 60 billion US dollars, but a significant portion of this remains in the USA. If the USA defaults in the event of a Trump presidency, Europe would have to raise at least an additional 30 billion euros per year.
Can we afford this?
Yes, we can. The EU’s economic output is around 17,000 to 18,000 billion euros. The amount needed for a combat-ready Ukraine is therefore less than 0.2 percent of the European gross domestic product (GDP). Economically, it is feasible. For Europe as a whole, it is not a huge amount of money, especially when measured against the goal of countering a military threat from Russia. Whether we can manage this is therefore not a question of economic ability, but of political will. Unfortunately, after the past few months, I fear that many in politics have not yet made the necessary rethink and that some politicians are more concerned with pension gifts for voters. This is not sustainable politics.