In Europe, the scene caused a blast. After the failed meeting between Ukrainian President Volodymyr Zelensky and Donald Trump this Friday, February 28, the Europeans put themselves in working order to recall their support for Ukraine. And prepare for a world where their ally would leave NATO. First, there was the London summit during the weekend, during which about fifteen countries reaffirmed its support for kyiv. Then, the president of the European Commission, Ursula von der Leyen, announced the implementation of a plan of $ 800 billion – 50 billion more than the post -Cavid recovery plan – to “rearm Europe”, a few days before the organization of an extraordinary summit in Brussels.
The situation has changed and each European leader has split a declaration of principle which goes in the direction of an increase in strategic and military capacities. In an interview with Figarothe French president Emmanuel Macron thus pleaded for the European States members of NATO to increase their defense expenses to “3, 3.5 % of GDP”. In most cases, they are still far away.
At the forefront, only four countries are “good students” with a budget dedicated to La Défense which is worth 3.08 and 4.12 % of their GDP. One of them – Greece – increased its military budget from 2020 while the other three – Poland, Estonia and Latvia – accelerated from the invasion of Ukraine by Russia in 2022. Lithuania is approaching and should exceed this symbolic threshold in 2025.
The common point of all these states? All have a land border with Russia. The other European countries, more distant from Moscow, are far behind, especially our Belgian and Spanish neighbors who do not even reach the 2 %threshold. Since 2014, however, it has been a prerequisite for all NATO member countries.
To gradually get out of the Americans, all will have to increase their efforts. But thus increasing the budget of the armies is not without consequences, neither on public debt, nor on the other components of public expenditure.
The “war pre-economy” of border countries
We have been talking about it for months: France’s budgetary situation is particularly critical. With a deficit equivalent to 5.5 % of GDP and a public debt which very largely exceeds 3,000 billion euros, Paris is far from the criteria of the Maastricht Treaty (a public debt less than 60 % of GDP and a controlled deficit, below 3 %). This is not the case for the three border countries which have managed to increase the budget of their defense for an increase in the deficit.
In 2022 and 2023, Poland, Estonia and Latvia recorded a much greater deficit than during the pre-Cavid period. But for two of them, it was the first time that they have exceeded the symbolic bar of 3 % since the early 2010s. The first time since 2014 in the case of Warsaw. In addition, even with noted military expenses, none of these countries has a public debt greater than 50 % of their national production.
Nevertheless, this increase in expenses related to the defense budget was accompanied by sacrifices, in particular a modification of the tax regimes in force. In Estonia, for example, VAT has been enhanced by 20 to 22 % and the rates of expand on alcohol, tobacco and gambling have also been increased. Same scenario in Latvia, where the taxation rate of microentreprises has been adjusted upwards to reach 25 %.
Note that none of these countries has lowered its social expenses to finance its military expenses, quite the contrary. In Poland in particular, the Government has maintained the ceiling on energy prices and decided to increase the salaries of public administration teachers and employees. But here again, these measures were made possible by efficient economic growth and a historic control of public spending. In more exsingues on the budgetary plan, complicated arbitrations will certainly have to take place.
Greece, a specific case
Historically, Greece has always had particularly high defense expenses compared to its European Union partners. The main reason: its geographic proximity to Turkey, its historic enemy. Today, Athens and Ankara are allied within NATO, this has never prevented Greece from maintaining its military budget at a high level.
In its 2025 budget, moreover, the government of the conservative Kyriákos Mitsotákis has decided to increase the defense spending from 3.6 to 6.17 billion euros, which should once again make Athens one of the “best students” of NATO.