CARL BILDT
STOCKHOLM – “Money makes the world go around,” sings the showgirl Sally Bowles in Cabaret, the iconic musical set against the backdrop of the Weimar Republic’s decadence. Money will certainly shape Europe’s future, as political leaders across the continent are forced to make painful decisions about how to allocate public funds in an increasingly unstable world.
Three urgent priorities are set to strain Europe’s public finances over the next few years. The first – and most obvious – is defense. The push to boost military spending is primarily a response to Russian President Vladimir Putin’s aggression, compounded by US President Donald Trump’s relentless criticism of America’s NATO allies. Together, these pressures have made strengthening Europe’s defense posture a strategic necessity.
The second, and arguably more urgent, priority is to support Ukraine in its fight against Russia. If Ukraine’s defenses were to collapse, a revanchist Russia would likely go on a rampage. Ensuring that Ukraine can continue to defend itself will require European governments to go beyond their existing defense-spending commitments.
And lastly, there is the lengthy process of producing the European Union’s next multiyear budget, which will cover the period from 2028 to 2034. The European Commission has already presented its proposal, but the real challenge lies ahead, as member states and the European Parliament must go through internal negotiations before agreeing on the final numbers.
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The Commission’s proposal includes increased funding for security, global commitments, and competitiveness, as well as additional support for Ukraine. Although these priorities have been widely supported, the reallocation of resources needed to fund them has been the subject of fierce debate. It is safe to say the Commission is headed for a bruising political showdown before a consensus is reached.
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