Politics like nature abhors a vacuum. And the decision made by President Trump to reduce America’s defense support of Europe has left one. It is Europe’s job to fill it, and played correctly, could be an opportunity.
European nations are on the frontlines of Putin’s territorial ambition and feel the risks acutely. With America moving toward withdrawal from support of Ukraine and NATO – and the implication that America will not support other nations facing Russian threats – the remaining members must ask: what now?
Canadian Prime Minister Mark Carney said the new reality would require Canada and other nations to lead a new world order that “excluded the U.S”. So, who will step up?
Europe has an economy 10 times that of Russia and must mobilize at scale. The President of the European Union Ursula von der Leyen has set out a plan to mobile $800 billion for regional defense, and the EU Executive branch has unveiled a $163 billion Euro loan program to frontload the buildup and notably has conditioned that these expenditures be mostly spent in the EU (as opposed to American manufacturers).
Prime Minister Starmer of Great Britain has pledged to increase his defense spending from 2.3 to 3.0% of GDP and (notwithstanding Brexit) has pledged support to a multinational fund and joint military financing. Germanys Friedrich Merz has increased their military funding as well and numerous German companies are converting factories to military application.
Through history economic growth has occurred in nations that are open, expansive and engage the rest of the world. Where the flow of talent and new ideas is embraced. Where different points of view and cultural differences converge. In his book “Cities in Civilization” Peter Hall points out that this is what happened in Athens in the 5th century, during the Renaissance in Florence, Vienna in the early 20th century and in the United States first in New York and later in the Bay Area.
In “America’s Edge” Anne Marie Slaughter argues that economic leadership in the 21st century will occur in nations that build networks starting with knowledge workers and universities that include global perspectives and global talent.
With current American policy reducing our military presence, pursing combative economics in the form of tariffs, and significant federal cutbacks in university research this opportunity may now become ‘Europe’s edge.’
Military investment and university research spurs innovation. Consider America and DARPA, the Defense Advanced Research Projects Agency that led to America’s breakthroughs in GPS navigation, mRNA vaccines, stealth technology AI, powerful electric batteries and AI. Other countries have had similar experiences. In Israel, like the United States, the military has produced many significant start-ups. And Ukraine has revolutionized drone warfare.
An increase in military expenditure and university research will accelerate product development, spinoff companies and increase economic output. It will increase European competitiveness in AI, digital infrastructure, semiconductors, and energy alongside producing weapons the rest of the EU will buy. As Rasmussen Jarlov, a leading Danish official said: “Buying American weapons is a security risk we cannot run.”
The United States played this hand in the last century where our post-World War II investments in public university research and in military research contributed enormously to the economic growth we enjoyed in the 1970s, 80s and 90s.
In recent decades the European economy has been stagnating, driven by demographics and social welfare costs. Making these commitments will require sacrifices from the Europeans. But they also come with long-term opportunities. The new world should awaken a new understanding and consensus that Europe must respond anew to the military and economic threats it faces – and that they are inextricably tied together.
Fred DuVal is an Arizona Regent, a business executive and decades ago he was a visiting scholar in the European Union Visiting Scholars Program.
