European leaders are planning to invest billions in the reconstruction of their militaries, from Brussels to Berlin. The spending is deemed necessary for Europe to prepare for possible security threats in an era when the United States may no longer guarantee its military support. However, many leaders also hope that this influx of funds will boost the continent’s struggling industrial sector and stimulate economic growth.

The connection between defense investment and competitiveness is a topic that European leaders will likely discuss at a meeting in Brussels, following the release of a European Commission paper on the future of European defense.

Ursula von der Leyen, president of the European Commission, recently emphasized that economic strength and Europe’s plan to rearm are two sides of the same coin, describing the investments as a “powerful tailwind for important industries.”

However, it is uncertain whether these goals will be achieved, as the challenges of implementing such a plan are significant. While there is a growing consensus that the increased military spending will provide some short-term benefits to European economies, the extent of those benefits will depend on how well the funds are allocated and utilized.

Most European countries have relatively modest defense industries, with France and Germany being notable exceptions. The continent has heavily relied on imports of American arms and equipment, particularly for the most advanced weapons, making it poorly equipped to immediately absorb new military spending.

European leaders are keen to change this scenario, seeking to gain greater control over their security and maximize the economic benefits of such investment.

Emmanuel Macron, the President of France, is advocating for countries to buy French missile-defense systems instead of American ones. Some nations like Portugal may replace their aging fighter jets with European rather than American planes, citing concerns over the Trump administration’s approach towards Russia.

However, building robust military industries in Europe will take time. Friedrich Merz, the likely incoming chancellor of Germany, highlighted the challenges in lawmakers before the loosening of constitutional limits on debt to allow more spending on the military.

While European countries have increased defense spending by nearly a third since 2021, their combined annual military budgets are still less than half of the United States’. Defense industries employed approximately 600,000 Europeans last year, compared to over 3 million in automobile manufacturing.

Europe will need to scale up existing industries for certain defense needs like tanks and missile batteries, while quickly developing new capabilities to rival American players in areas like drone technology and high-tech weapons.

There is also a risk of redundancy, with European nations potentially duplicating efforts by buying domestically rather than from other European countries. This could mute both economic and strategic benefits.

The success of this endeavor will largely depend on the effective coordination of investment and purchasing. While the economic benefits are likely, they may not be sufficient to buffer governments against populist backlash.

Philip Olafson contributed to the reporting.

Source: https://www.nytimes.com/2025/03/19/world/europe/europe-military-spending.html