Europe does not have to choose between guns and butter. There is another way | Shahin Vallée and Joseph de Weck

European governments again have a difficult choice between army financing or spending on social programs. This, in any case, is the narration that dominated Donald Trump’s retreat from the global security matter after the war and the urgent pressure to rebuild smuggling Europe.

But framing the dilemma facing Europe in this way is a big mistake. History teaches us that the political option was never about weapons, butter, but weapons or taxes.

It seems that the collapse of the Soviet Union in the early 1990s closed nearly a century of global ideological conflict, but it was also supposed to make us all richer. With the end of the Cold War, Europeans will not need to support an expensive military apparatus for regional defense. Governments got rid of recruitment and walked to the return of defensive expenses. In the disbursement of the so -called “peace dividends”, governments can spend on local priorities for their appearance, which enhances non -military investment.

The NATO summit showed last month in The Hague How this tide was greatly reversed. Russia’s extensive invasion of Ukraine and Trump’s uncertain commitment to NATO means that European governments have no choice but to invest in its mutual defense. Peace profits, as Crystalina GeorginivaThe President of the International Monetary Fund stated“gold”. NATO members in Europe Pledge Spending on “difficult defense”, such as tanks and military salaries, from 2 % to 3.5 % of GDP by 2035.

The question now is how to finance it. to Some expertsThe only way to build a war state that Russia can deter is to reduce social spending. After all, the misguided argument goes, and the governments in the nineties have been savored by defending the expensive luxury promises.

Even before the NATO agreement in The Hague, the public was reduced for the new reality. In March TV address, French President, Emmanuel Macron, warned Citizens that in a “brutal” world, they will have to make sacrifices in the budget. Macron excluded higher taxes. Denmark Prime Minister Metty Friedrixen decided Canceling a public holiday To finance high defense spending. The UK has been concerned with anxiety in the international development aid budget for the same reason.

But Europe will draw completely wrong lessons from history if the welfare state is weakened to build a military state. Another way: instead of reducing social spending, European governments must raise taxes on companies and capital to finance deterrence.

Let’s take a look at what actually happened in the 1990s. While reducing defensive spending after the collapse of the Soviet Union allowed governments to increase social spending, it often gave them a room to reduce taxes and budget deficit, which they did with great enthusiasm, with the neoliberal consensus in the 1990s and the intensification of tax competition.

Yes, “Peace Bourse Distribution” helped funding Significant increase In social spending, but with aging societies, they were mostly allocated to pension, health and long -term care. Social protection for working age residents He fell All over Europe Since the end of the Cold War.

But from the mid -eighties to 2023, Corporate income tax rates He decreased by half within the Organization of Economic Cooperation and Development (OECD). Capital profit tax rates significantly decreased: from 53 % in the early nineties to 26 % today in GermanyOr from up to 30 % to 24 % Today in the United Kingdom for the same period. The “peace profits distribution” was actually a blessing for the richest in Europe.

The defense savings not only went to the private sector through tax cuts, but also by lower financial deficit. Germany’s adoption of the controversial constitutional “debt brakes” helped in 2009 to achieve a balanced budget; Something was impossible without cutting defensive spending to the bone.

In the coming years, Europe cannot bear the burden of defense accumulation of the most deprived groups. More public debts, as Germany has now, will be necessary. But the debts are often a return tax, and weigh more on the poorest, as the wealthy possess a large share of debts. Moreover, if the European Union members do not agree to joint borrowing to finance the increase in defense, as happened during the epidemic, the financial markets may not allow the European Union countries with high load, such as Italy or France, to increase spending on deficit deficit.

Consequently, the “new natural” of high defensive spending should also be funded by increasing taxes, especially on companies, high wealth and capital gains. This will not be possible without limiting tax competition in Europe.

In fact, the idea that some European tax havens continue to absorb the tax resources of companies from others while they are free to spend their defensive, will be increasingly difficult. France and Germany have long pushed to coordinate corporate taxes through the 27 members of the European Union. The European Union must now restrain tax countries such as neutral Ireland. Europe cannot achieve a better defense without better tax returns.

And it is only possible for the accumulation of defense supported by the broader audience throughout Europe to exceed the momentum in the short term and thus develop into a reliable deterrence.

The “Keynesian Military” experience globally, and throughout history, was never about weapons or Butter, but guns and Obesity. In the war, it does not only need weapons, but also the supporters supporting them. Preserving peace on the internal front is no less important than carrying the line in the trenches. Instead of reducing the welfare state to build a military state, European leaders must think about how to improve and modernize social spending. Only the possibility of a better and more just world will keep our societies united and able to fight.