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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The innocence of that summer is touching to recall now. In a far-off past called 2024, when Britain elected a Labour government, optimists made the bull case for the country. Emmanuel Macron had budget troubles in France and Germany a recession, so the UK struck them as a relative haven. (As though there were three countries on Earth to invest in.) Instead of constant Tory paranoia about a bond market revolt, there would be people in charge willing at last to borrow to spend. (There soon followed a bond market revolt.) “Britain is back, and the world wants a piece” is one of the headlines that have aged like milk.
Bull, indeed. We now know that British output shrank in January. This is before the government’s tax increases and regulations on employers become law. As ever, smart people let well-founded distaste for the Conservatives tip over into astounding naivety about their opponents. It wouldn’t matter, except Britain’s problems are Europe’s in miniature: not enough growth, so not enough fiscal revenue, so not enough defence spending, at least without sacrifices elsewhere, for which there is not enough public support.
Perhaps, then, we should hold off on the idea that, as one un-prescient official said during the 1990s Balkan crises: “This is the hour of Europe.” A triumphal note has crept in of late, which posits that Donald Trump’s betrayal of the continent is proving to be the making of it. This is based on — what?
Germany is serious. The Bundestag voted this week for theoretically unlimited borrowing to re-arm. But defence commitments elsewhere are hazily funded. The Spanish prime minister won’t cut a “single cent” of social spending. Labour is suffering internal strife over benefit reforms that won’t save £5bn a year until the end of the decade. The willingness of citizens to forgo private consumption or welfare for defence is untested, at best. A historic turning point is only a historic turning point if the public agrees it is.
The financial question isn’t even the hardest facing Europe. A consensus for more defence spending is worth only so much without a consensus for actually deploying force. Nothing of the kind exists. Downing Street alludes to a “significant number” of countries willing to send troops to Ukraine. Which countries? How many soldiers each? Under what rules of engagement? If Russia won’t accept troops from Nato states in Ukraine, whether or not in a Nato capacity, will Europe insist? Next to these questions, which the continent doesn’t have years to answer, the matter of funding is a picnic.
I wonder if these months will be remembered not as the moment Europe united, but as the moment its north-south split became the central fact of continental politics. Giorgia Meloni, who is pro-Ukraine for an Italian populist, dismisses the idea of sending her nation’s soldiers there. Spain wants defence spending to include its investments in cyber and climate, because Russia will hardly “bring its troops across the Pyrenees”. (Or across the Channel, I wager, but Britain still takes European hard power seriously. It is strange which nations are communautaire nowadays, and which aren’t.)
It is fine to talk about Europe as an underachieving military power, able to call on more people than America’s 340mn, but southern Europe is no small share of that population. Bar Poland, the countries on the continent that spend most on defence as a share of income, such as Latvia, are among the smallest. Even if Germany joins them in time, Europe’s potential manpower starts looking less awesome without the Mediterranean. And this doesn’t reckon with the prospect of Berlin deciding that fielding troops in the east carries too much historical freight to bear.
This month, a graph from analysts at S&P Global Ratings came my way, and vindicated the cynic in me. The x-axis is a capital’s distance from Moscow in kilometres. The y-axis is its defence spending as a share of national output. With some exceptions — well done Greece — there is an inverse relationship between the two, with the well-protected south of Europe skimping, and the exposed north-east spending well above the Nato mark of 2 per cent of GDP. What compounds this problem are the respective populations. Portugal, one of the lowest spenders, has more people than all three Baltic states combined. Spain is bigger than Poland. If threat perceptions and defence contributions diverge either side of (roughly) the 45th parallel, it will matter.
There is no shame in looking for hope, even false hope. Optimism is so vital a trait for survival that whole yards of literature exist on whether it was evolutionarily selected for. But there is optimism, and then there is twisting oneself into hideous contortions to deny reality. The American version of this is the constant attribution of strategic thought to Trump’s every reflex and mumble (“he’s doing a reverse Nixon”).
The European version? Premature talk of a unified and serious continent: all the better for being the inadvertent creation of a US president who loathes it. We don’t know what European citizens are willing to give up for rearmament. We know even less which ones will bear those arms, where. Until that changes, the metaphor of a giant stirring after all too long a sleep is imperfect. The continent is half-awake, with rheum in its eyes, perhaps still hoping to ignore the alarm.
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