I have a rather strong feeling that Spanish politicians are greatly underestimating the anger they are generating in the Scandinavian and Baltic countries, as well as in Poland. I regularly speak with colleagues from those countries about this issue, and they bitterly complain about Spain's selfish position in not wanting to make a fiscal effort for European defense. Without getting into whether this is true or not, if this idea takes hold, we could be facing the end of the European fiscal integration process.
I think you are right. Specially when we remember that Spain was the second largest beneficiary from the NextGen plan for the pandemic recovery- and we are growing exclusively because of this.
Very interesting read. On the third challenge you highlighted: EDM owning strategic assets-and working with a majority rule-sounds very close to common EU defense.
This solution is the best one I have heard so far, but I wonder how much it moves the needle when it comes to the lack of political will to centralize defense decisions
It is the usual "lets find a technical solution that obviates the political problem" type of clever design that Europe specialzes in. The jury is still out on whether it may work- but I agree, this is our best possible path forward.
Excellent post. It is clear that the excessive variety of models in all defense platforms (MBT, subs, frigates, howitzers, etc.) is a waste of resources. And that without the strategic enablers (i.e., without the USA) European armies become substitutes, not complementary to each other.
I also agree that it is better to aim for a pragmatic middle way than to aim (and fail) for a political union on defense matters. As an example, during the worst war so far (WWI), it took the Entente until March 1918 (!) to appoint Foch as Supreme Allied Commander, and they had fewer countries to coordinate.
Thanks very much, Borja. Indeed, a bad precedent that we hopefully have learned from (2WW was better, no least because the Americans set the rules). For Europe right now it is do or die-let's hope Trump is enough of a shock to get us out of our set ways.
Interesting piece Luis. I am sure you are right that the EDM proposal is the most pragmatic middle way available given current political constraints. But it is surely very much second best. It creates yet another issuer of common European debt underpinned by its own unique guarantees to add to the various other varieties of common debt already in the market. Yet the geoeconomic imperative for the EU right now, even more so in the light of Trump’s assault on the credibility of the dollar, is surely to create a deep pool of common European debt with the same funding structure to create a safe asset that the market can readily understand and absorb. For that reason, I would have thought that a key consideration in the design of any inter-governmental EDM is that it can be readily brought within the treaties as soon as circumstances allow as was the case with the ESM. But that would of course mean excluding the UK, Norway and Ukraine. Quite a problem…
Hi Simon, thanks for the comment. Yes, the membership issue is now essential, and the unanimity rules that bind Europe too. But it is true Europe now has an opportunity amid the mess (see the Bund-Treasury differential). Will write about that.
I have a rather strong feeling that Spanish politicians are greatly underestimating the anger they are generating in the Scandinavian and Baltic countries, as well as in Poland. I regularly speak with colleagues from those countries about this issue, and they bitterly complain about Spain's selfish position in not wanting to make a fiscal effort for European defense. Without getting into whether this is true or not, if this idea takes hold, we could be facing the end of the European fiscal integration process.
Ricardo,
I think you are right. Specially when we remember that Spain was the second largest beneficiary from the NextGen plan for the pandemic recovery- and we are growing exclusively because of this.
Very interesting read. On the third challenge you highlighted: EDM owning strategic assets-and working with a majority rule-sounds very close to common EU defense.
This solution is the best one I have heard so far, but I wonder how much it moves the needle when it comes to the lack of political will to centralize defense decisions
It is the usual "lets find a technical solution that obviates the political problem" type of clever design that Europe specialzes in. The jury is still out on whether it may work- but I agree, this is our best possible path forward.
Excellent post. It is clear that the excessive variety of models in all defense platforms (MBT, subs, frigates, howitzers, etc.) is a waste of resources. And that without the strategic enablers (i.e., without the USA) European armies become substitutes, not complementary to each other.
I also agree that it is better to aim for a pragmatic middle way than to aim (and fail) for a political union on defense matters. As an example, during the worst war so far (WWI), it took the Entente until March 1918 (!) to appoint Foch as Supreme Allied Commander, and they had fewer countries to coordinate.
Thanks very much, Borja. Indeed, a bad precedent that we hopefully have learned from (2WW was better, no least because the Americans set the rules). For Europe right now it is do or die-let's hope Trump is enough of a shock to get us out of our set ways.
Interesting piece Luis. I am sure you are right that the EDM proposal is the most pragmatic middle way available given current political constraints. But it is surely very much second best. It creates yet another issuer of common European debt underpinned by its own unique guarantees to add to the various other varieties of common debt already in the market. Yet the geoeconomic imperative for the EU right now, even more so in the light of Trump’s assault on the credibility of the dollar, is surely to create a deep pool of common European debt with the same funding structure to create a safe asset that the market can readily understand and absorb. For that reason, I would have thought that a key consideration in the design of any inter-governmental EDM is that it can be readily brought within the treaties as soon as circumstances allow as was the case with the ESM. But that would of course mean excluding the UK, Norway and Ukraine. Quite a problem…
Hi Simon, thanks for the comment. Yes, the membership issue is now essential, and the unanimity rules that bind Europe too. But it is true Europe now has an opportunity amid the mess (see the Bund-Treasury differential). Will write about that.