A. The disconnect between aspirations and reality

A first aspect of the rearmament plan that warrants attention concerns the extent of the transformation being pursued by the European Union. In their joint white paper for European defense – named Readiness 2030 Footnote ¹³ – the European Commission and the High Representative for Foreign Affairs and Security Policy state in unequivocal terms that Europe stands at a critical crossroads. Two main possible paths are envisaged. On the one hand, Europeans could continue with a policy of muddling through, characterised by cautious and incremental adaptation to the emerging challenges. On the other hand, they could opt for a resolute shift, directly confronting the threats it currently faces.Footnote ¹⁴ Given the gravity and the magnitude of the external threats, the Commission and the High Representative clearly advocate for the latter course. They claim to be now convinced that the policy of small steps is a luxury that European governments can no longer afford.Footnote ¹⁵

Based on this rhetorical premise, one could legitimately expect the Commission to go bold and advance decisively in the direction of strategic autonomy or, in more plain language, of state-building.Footnote ¹⁶ This would mean at least redefining the governance of EU defence and leveraging on defence to launch a plan of massive public investments aimed at strengthening European economic and social infrastructures.

However, when one moves from rhetorical declarations to the level of concrete initiatives, it quickly becomes apparent that radical change is not truly on the agenda.

Take, first, the governance of EU defence. As much as the Commission strives to affirm European strategic autonomy,Footnote ¹⁷ and as the reference to European sovereignty escalates in public discourse,Footnote ¹⁸ in practice the White Paper reaffirms the decisive importance of NATO,Footnote ¹⁹ a circumstance that realistically signals that now and in the near future European countries will not be able to do without the decisive assistance and leadership of the US (or do not want to renounce to such contribution and, consequently and unavoidably, dependence).Footnote ²⁰ This choice allows the European institutions, rightly or wrongly, to continue to gloss over the issue of the government of European defence. In particular, it leaves unanswered the question of how the combined defence potential of a disparate group of states can be made credible in the absence of effective mechanisms for military coordination in the event of a real conflict. In other words, the fundamental question remains: how the imperial (more piously called hegemonic) role played by the United States will be discharged if the EU were to achieve full autonomy in defence and security? Put more bluntly, how will command be organised once the default option of assigning it to the ‘foreign prince’ (ie, the US) is no longer available?

In that regard, the set-up outlined by the Lisbon Treaty could only brave the waves if never tested in high-intensity warfare. This is rather unsurprising if we remember that it was designed to conduct peace-keeping or conflict prevention operations within NATO.Footnote ²¹ But if that is the case, then the deterrent potential of the Lisbon framework is minimal, if not virtually nonexistent. Establishing an effective chain of military command would require more than operational adjustments; it would necessitate a major revision of the EU Treaties, one carrying profound constitutional and political implications.Footnote ²² Nevertheless, the White Paper does not even mention Treaty reform. No wonder: also when it comes to defence, amending the treaties is complete taboo at this point of time. The shadow that the constitutional failure of 2005 keeps on casting on European politics is long. Moreover, the appetite for such reform among European publics remains to be democratically tested, not least because everybody realises that the creation of a military command structure, 20 years after the introduction of a single currency, would be a decisive step in the direction of creating a state-like EU. It is then understandable why on such a crucial point the Commission and the European Council are extremely reticent, so much so that they either fudge the issue or simply avoid it.Footnote ²³

However, if the threat we face is as real as the European institutions claim, and the Union avoids acting as seems to be objectively required by the circumstances, then it is hard not to draw the conclusion that the Union continues to be utterly unprepared. Should the protection offered by NATO’s Article 5 actually falter (as leading institutional actors seem to assume now will happen in the not distant future, if it has not already disappeared de facto),Footnote ²⁴ Europe will have no choice but to turn to the ‘smaller’ internal solidarity in the absence of ex ante arrangements about how to combat together.Footnote ²⁵ Indeed, at that point of existential urgency, it will be found that any collective response requires a unanimous vote,Footnote ²⁶ not exactly the most propitious way to proceed in the middle of a war, not even a Cold one.

B. Is long-term strategic autonomy compatible with the ‘deal’ with the United States?

The incapacity of the EU to achieve strategic autonomy is not confined to its unwillingness to reform the governance of defence. An additional hurdle in the attainment of that goal has emerged in the context of the ‘deal’ with the United States on trade and investment. As said, rearmament plans have been justified also in the name of the perceived risk of US disengagement from European defence. While the ultimate goal of the Union is to make Europe ready for the day in which the US defensive umbrella will no longer be there, in the short run it is regarded as imperative to avoid a too sudden and too quick American withdrawal. Such an imperative has been regarded as a good reason to grant the present US administration a set of major concessions, not only in terms of ‘burden-sharing’ within NATO,Footnote ²⁷ but also through a ‘deal’ on trade and investment, as scenified in President Trump’s private resort in Turnberry (Scotland) on 27 July.Footnote ²⁸ What may be characterised as a politically but not legally binding text reflecting the ‘deal’ was jointly produced and published on 21 August.Footnote ²⁹ It is worth quoting paragraph 7 at length, which reads:

This is a remarkable sentence, for three reasons.

First, because the actual levels of procurement from the US are already very high. If we are to consider as accurate the figure provided in the Draghi report of late 2024, 63 per cent of all EU defence orders between mid 2022 and mid 2023 (close to 88 bn according to official EDA figures for the 2023 year)Footnote ³⁰ were placed with US firms (ie, around 55 bn euro).Footnote ³¹

Second, because the degree of a peculiar form of ‘interventionism’ resulting from the deal, while unsurprising when it comes to the defence sector, reveals the extent to which European rearmament is certainly going to proceed on the basis of non-market albeit thoroughly capitalistic arrangements (US corporations clearly fit that characterisation). The degree of contagion of this very peculiar form of interventionism becomes clear in paragraph 5 of the same joint statement:

The third and fundamental reason why we should pay attention to this sentence is that what the EU is pledging to do contradicts the proclaimed willingness to take steps in the direction of strategic autonomy. More than acknowledging a disengagement of the US from the European scenario, this commitment signals an intention to postpone sine die the plan for the EU to become autonomous in defence and security terms.

It remains to be seen to what extent the joint statement is translated into binding EU legislation and fully fleshed institutional decisions. But the mere fact of its existence confirms the confused and contradictory nature of European plans on defence, where aims and goals hardly match likely consequences and implications.

C. Are cannons (and drones) to be bought at the expense of butter?

The gap between aspirations and reality in EU defence plans is not simply a matter of ineffective governance or contradictory attitudes toward the US. Even more troubling than these uncertainties is the deep confusion within these documents about what, precisely, Europeans are expected to defend. To be sure, the war in Ukraine, escalated with the 2022 Russian invasion, has resulted in a state of open confrontation constituting a tangible security threat, especially for the Member States sharing a physical border with Russia. All this seems to have constituted a powerful reminder of the need to patrol and protect EU physical boundaries.Footnote ³² However, in those very documents Europe is portrayed not just as a territory but also as a ‘way of life’.Footnote ³³ In theory, this might sound inspiring: at its most optimistic, the commitment to defend the European ‘way of life’ could signal a broader pledge to move beyond austerity and fully (re)embrace the European social model. Indeed, even some progressive critics of EU austerity view the rearmament plan as a chance to bolster the EU’s economic and social credentials through defence investment.Footnote ³⁴

Nevertheless, what the EU actually has in store falls far short of military Keynesianism (a far from uncontroversial concept).Footnote ³⁵ The Council Recommendations allowing Member States to activate the national escape clause foresee that the deduction of military expenditures from the net expenditure calculation will leave national budget balances unaffected. But only during the first four years. After that, as the Commission itself stated,

In plainer language, the Commission is reminding States that paying for defence and security will require, given the economic, social, and demographic circumstances in which the EU finds itself, increased taxation and/or reductions in other items of public spending. As we pointed, Chancellor Merz is already on record claiming that Germany should downsize its welfare state.Footnote ³⁶

It is to say the least paradoxical that the defence of the ‘European way of life’ may indeed lead to the further dismantlement of the European social model, without which not only the European way of life may become a squalid copy of the US one, with inevitable detrimental consequences on the very fabric of social integration in Europe and, ultimately, on its very security. All the appeals to the defence of the ‘rule of law’ and EU values should be complemented with the prescient insights coming from the interwar period, concerning the impossibility of a rule of law ‘without adjectives’ (that is, divorced from solid democratic and social commitments) to keep society whole. There is no democratic legitimacy and no national security without a Democratic and Social Constitutional State.Footnote ³⁷ Claiming that we cannot afford anymore the latter to pursue the former is a statement revealing a lack of understanding of the history of Europe.Footnote ³⁸

D. The asymmetric strengthening of national military industrial complexes

In fact, far from venturing in uncharted waters, the strategy prepared by the Union develops in full continuity with the strategic objectives and modes of governance pursued and the instruments employed in the recent past.Footnote ³⁹ In the short term, the support to Ukraine initiated with the Act in Support of Ammunition Production (ASAP) Footnote ⁴⁰ and the EU Military Assistance in Support of Ukraine (EUMAM) ^{Footnote 41} is confirmed. In the medium to long term, the Union creates conditions for its Member States to ‘improve [their] military capabilities’.Footnote ⁴² In this regard, most of the economic effort will fall on national governments, which are called upon to increase investment and current spending in a number of priority areas related to high-intensity warfare. It is important to keep in mind that more than a plan to create a supranational defence policy, the Commission and the High Representative are proposing to render possible that each European state rearms itself.Footnote ⁴³

Indeed, the role of the Union is essentially auxiliary. The contribution of supranational institutions comes first and foremost in the form of subsidised loans aimed at fostering the coordination and interoperability of national defence systems. Additionally, it is foreseen that European rules would be streamlined, so as not to hinder the mobility of troops within European territory.Footnote ⁴⁴ The initiatives planned in this regard are many but also rather scattered. Most of them are yet to be translated into binding norms, so, unsurprisingly, the definition of some of the objectives remains rather unsettled at present.Footnote ⁴⁵

At any rate, boosting defence investment is clearly the top priority for the Union. At first glance, the overall proposed scheme largely follows the template of the twofold supranational response to the Covid-19 emergency. First, fiscal rules are relaxed (selectively) so as to encourage national public investment in military expenditures. Thus, the political and fiscal space is effectively ‘created’ by carving out exceptions to the ordinary rules, allowing Member States to increase spending on defence and security. Second, a European financial assistance instrument is set up for the Member states with a view to coordinate state’s spending (notably, avoiding duplications and creating synergies) and introduce an element of equalisation so that all Member states are in the position of increasing their military and defence expenditure.

Yet, upon closer examination, there are striking differences between Readiness 2030 and the response to the Covid-19 emergency. While the defence plan encourages national governments to finance military spending through market borrowing, it critically lacks the equivalent of both the Pandemic Emergency Purchase Programme, Footnote ⁴⁶ the ECB plan that during the pandemic mitigated the borrowing costs for highly indebted member states, and the Next Generation EU, Footnote ⁴⁷ the one-off fiscal plan providing substantial support to national recovery plans in the form of non-repayable grants and cheaper loans. Lacking the widespread consensus necessary to, respectively, allow ECB activism and approve robust EU fiscal measures, what the EU has on offer is only the Security Action For Europe (SAFE),Footnote ⁴⁸ a more modest temporary and emergency instrument aimed at strengthening the European defence technological and industrial base through a EUR 150 billion fund, borrowed by the Commission on capital markets, and used to finance loans to national governments.Footnote ⁴⁹

Unsurprisingly, the absence of robust equalising measures has already created the preconditions for further divergence. On the one hand, many fiscally constrained Member States have refrained from profiting from the relaxation of fiscal rules.Footnote ⁵⁰ On the other hand, several countries have accelerated tremendously their spending plans. Germany, in particular, has moved decisively in that direction. Its recent constitutional amendment permanently exempts defence expenditures exceeding 1 per cent of GDP from debt-brake rules.Footnote ⁵¹ Additionally, it creates a EUR 500 billion special fund for infrastructure and climate neutrality, valid for 12 years.Footnote ⁵² This move not only entrenches Germany’s fiscal dominance but also widens the gap with other member states lacking comparable fiscal room.

A. Suspending or materially breaching the new Stability and Growth Pact?

To favour national military spending, the Commission has opted for the coordinated activation of the national escape clause of the new Stability and Growth Pact.Footnote ⁵⁴ Such a decision reflects the impossibility (acknowledged by the Commission itselfFootnote ⁵⁵) of taking advantage of the general safeguard clause. The latter can only be triggered when a ‘serious economic downturn in the eurozone or the Union as a whole’Footnote ⁵⁶ occurs. Such a condition is not met at the present time.Footnote ⁵⁷ This is why the path of activating in coordinated fashion national escape clauses is followed. In July, the Council, based on a Commission recommendation, authorised the relaxation of fiscal rules for 18 requesting states.Footnote ⁵⁸

There are several reasons to believe that such a modus procedendi is legally problematic. First and foremost, it is hard to avoid the conclusion that it is directed at circumventing limits that the European legislature established only last year, i.e., at a stage when the alleged looming military threat to Europe was already fully known. Indeed, the European Commission and many national leaders insisted on such threat once and again since, at latest, February of 2022. For conflicts that have been raging for years to be considered as a sufficient reason to trigger the escape clauses, it would seem necessary at the very least the provision of reasons of what has actually changed recently, so that institutional actors come at a different assessment of the situation now than they did in 2022, 2023 and 2024. We are not aware of any such set of reasons having been put forward. And yet, the Commission presents Russia’s war of aggression against Ukraine and the associated threat to European security as an exceptional circumstance ‘beyond the control of the member state’ with ‘significant repercussions on its public finances’, precisely the conditions to be met to trigger the national escape clause.

This leaves two sets of questions unanswered.

First, the concrete repercussions of the current war scenario on national public finances are merely asserted rather than substantiated through studies, empirical data, or economic forecasts. In this respect, a genuine impact assessment is entirely absent. Given that defence and security expenditure are policy domains in which public authorities, by definition, enjoy broad discretion, one might reasonably expect the Commission to consider itself under a heightened obligation to provide such an assessment.Footnote ⁵⁹ Second, the claims regarding the fiscal impact of the war are made a full three years after the recrudescence of the conflict in Ukraine. Why are the clauses activated when the most serious impact of the war on the European economy has already been addressed (as indeed, again, authorities have claimed)?Footnote ⁶⁰

While on this specific point it will be easy for the policymaker to invoke the wide discretion inherent in decisions such as those under discussion, it may be less easy to overcome another order of issues concerning the contrivance of the coordinated activation of the national safeguard clause.

In particular, it is possible to challenge the assumption from which the European Commission moves, namely, the supposed diversity of circumstances that would allow the use of the national safeguard clause (Article 26 of Regulation 2024/1263) and the general safeguard clause (Article 25 of the said Regulation). As anticipated, the Commission considers that only the general clause is conditional on the existence of a serious economic downturn, while the national clause could already be available in the presence of unspecified exceptional circumstances beyond the control of the member state. Starting from this assumption, the alleged general economic problems resulting from Russia’s invasion of Ukraine are broken down into a series of national economic problems, with the result that the obstacle posed by the discipline of the general safeguard clause is circumvented. This already raises a few perplexities and an administrative lawyer might even discern in it indications of a misuse of power. When the conditions are not met to apply the general clause, a similar effect is obtained by means of transforming the collective issue in a sum of individual problems. But scepticism is bound to increase as soon as one delves deeper into the analysis of the rules in question. While it is true that the interpretation put forward by the Commission is superficially grounded in the letter of the said Articles 25 and 26 of Regulation 2024/1263, it is equally evident in Recitals 40 and 41 of the same regulation that both clauses were designed to cope with serious economic downturns. In other words, the difference between the two clauses seems not to be qualitative, but only quantitative: the national clause is aimed at coping with economic downturns circumscribed to a Member State, while the general clause is aimed at a recession affecting the Union as a whole. If this were the case, not even the national escape clause would be available in the current circumstances.

Doubts about the legitimacy of the use of the national escape clause can finally be expressed with respect to its selective nature. In fact, the activation of the clause will neither lead to a revision of the ‘reference trajectories’ (the public spending reduction targets previously agreed upon at the European level),Footnote ⁶¹ nor to a general loosening of fiscal rules (as happened during the Covid-19 pandemic). The Commission aspires to a narrower and more targeted outcome, namely to allow the decoupling of military spending, and military spending alone, from both the net expenditure reduction trajectory and from the correction path within the excessive deficit procedure. Therefore, the deviations allowed under the escape clause will be strictly monitored and contained with reference to the expenditure items concerned. Or, to put it in technical terms, only expenditures concerning the COFOG division 02 – Defense category will be allowed, for a precise amount (a maximum of 1.5 per cent of GDP is set, taking, as already pointed, 2021 military spending as a basis) and for a limited period of time (4 years).Footnote ⁶²

Even the legal soundness of this move appears precarious. Once again, the Commission seems to be opting for a shortcut of questionable legality, bypassing what would have been the most appropriate instrument to achieve the intended goal – namely, an amendment to the Stability Pact aimed at expanding the ‘golden rule’. Specifically, a temporary revision of Article 2(2) could have allowed military expenditures to be included among the deductible items when calculating the ‘net expenditure’ of Member States. However, even amending the Pact appears a political taboo. Still, the fact that those seeking to preserve the Pact’s full binding effect are the same actors who are in favour of dodging its norms for military purposes does not justify attempts to circumvent them. Legal coherence demands transparent reform rather than opaque maneuvering around existing provisions.

B. SAFE: precarious legal basis, modest equalization of defence and security expenditure and limited coordination

As said, the second component of the European rearmament plan is the Security Action for Europe (SAFE).Footnote ⁶³ As noted, this instrument is supposed to play a complementary function to national rearmament programsFootnote ⁶⁴ by ensuring that all Member States have sufficient resources for rearmament and, at the same time, that military expenditure is carried out in a coordinated manner (translating into an actual coordination of the efforts to increase defence and security capabilities).

The model followed is that of SURE, the instrument used during the pandemic to provide financial assistance for unemployment support costs incurred by Member States.Footnote ⁶⁵ SAFE is also rooted in the emergency legal basis of Article 122 TFEU and, just like SURE, authorizes borrowing in the Commission’s financial markets totalling EUR 150 billion.Footnote ⁶⁶ These resources will in turn be used for loans extended to Member States to finance their military expenditures.Footnote ⁶⁷ It is not clear according to what criteria the sums found in the markets will be allocated to the Member States nor what interest rate will be applied to these loans. What can be said at this point in time is that the rationale for this back-to-back lending is that for several national governments the loans provided will be cheaper than ‘direct’ borrowing in the financial markets and that Member States will have up to 45 years to repay the loans received.Footnote ⁶⁸ The only European dimension at the level of execution comes in when it is claimed that Member States will have to deploy these resources primarily through joint procurements with other Member States (or Ukraine or states belonging to the EEA).Footnote ⁶⁹

Regarding the legitimacy of this instrument, Article 122 TFEU is confirmed in its role of passepartout legal basis for financial assistance interventions to Member States, although it should be pointed out that the JURI Committee of the European Parliament vigorously challenged its approval, believing that the act in question should also be rooted in Article 173 TFEU (industrial policy).Footnote ⁷⁰ On such a basis, the European Parliament has actually brought the conflict with the Council before the Court of Justice (while stressing that the Assembly does not question the substantive merit of SAFE).Footnote ⁷¹ Whether intentionally or not, that reveals in itself the extent to which defence expenditure is regarded as a way of building up an industrial policy by other means. Moreover, the legal basis of SAFE is problematic not only due to the exclusion of the European Parliament from the legislative process, but also because it appears to unduly broaden the scope of Article 122 TFEU to encompass circumstances that, until recently, were considered to fall outside its remit. Notably, the Council Legal Service, in its opinion on the establishment of NGEU, expressly stated that

If one were to take the Council at its own word, the conclusion seems inescapable: Article 122 TFEU cannot serve as a sound legal basis for financing deterrence programmes, which by their very nature are forward-looking and preventive.

Admittedly, in light of the gravity of the looming threats, debating the precise contours of Article 122 TFEU may risk appearing as the kind of legalistic formalism that undermines the credibility of both the Union and the legal profession that serves it.Footnote ⁷³ Thus, let us focus on substance and ask whether SAFE can deliver on what it promises, namely heightened and more efficient military investments. If we look at the size of the increase, no doubt, the Union’s financial commitment is certainly substantial. Yet, as we already pointed, it is bound to remain very small in relation to the likely defence and security expenditure of the Member States (or to be more precise, of some Member States, Germany in primis). This leads us to suspect that SAFE is unlikely to be able to perform an effective equalizing action, with detrimental consequences for the territorial cohesion of the Union and the tightness of the internal market.

If we look instead to the capacity of SAFE to promote a more efficient use of financial resources, two considerations are in order. The first is that because of its small size, SAFE is unlikely to act as a catalyst for effective coordination of national military expenditures. In fact, while it is possible to assume that through joint procurement the Commission will be able to rationalise, not without difficulty, the interventions financed with European resources, it still remains unspecified how the expenditures financed with national resources will be coordinated in order to avoid duplication and waste.

The second is historical experience with defence expenditure, a field in which the record points to the serious risk of capture of public institutions by the military–industrial complex and subsequent waste of public resources for public money.Footnote ⁷⁴ Such concerns are conspicuously absent in the rearmament debate at the institutional level. This is even more surprising because Readiness 2030 is not the first step taken in the direction of common defence expenditure. The European Defence Fund (EDF) was created back in 2021.Footnote ⁷⁵ The resources allocated to the EDF are certainly not negligible (more than 1bn euro per year, with a total of almost 8bn for the period 2021-7), even if clearly very small in comparison to overall defence expenditure on the side of EU states.Footnote ⁷⁶ One would have expected lessons to be drawn from the EDF when designing SAFE. However, the Commission seems to have paid attention only to the official mid-term assessment, which emphasised the need of increasing significantly the resources of the Fund while engaging in a rather light substantive review of potential shortcomings.Footnote ⁷⁷ Indeed, we have already some signals of a rather casual attitude toward transparency in the project review processes, which may have already resulted in waste of public resources and enrichment at the cost of taxpayers’ money.Footnote ⁷⁸