Key European countries may have to double their defense spending to meet the challenge of Russian aggression in Ukraine, as well as the possibility of less American support under the presidency of Donald Trump, writes Bloomberg, quoted by BTA.
Europe's largest NATO member states may have to increase their military spending by as much as $340 billion a year, rising to a total of $720 billion, Bloomberg Intelligence analysts led by George Ferguson wrote.
During his election campaign, US President-elect Donald Trump said he would reduce America's security relationship with Europe, and at an alliance summit in his first term he threatened to leave the military alliance , if the Allies do not increase their spending.
„Russian aggression is already stimulating an increase in defense spending in Europe,”, notes Ferguson. “However, they may need to increase to support Ukraine, counter Moscow's broadly aggressive regional posture and respond to deepening strategic competition with China.
Former European Central Bank President Mario Draghi has warned that the European Union will descend into a “slow agony” if member states do not act quickly to boost productivity in the region through additional investment. He pointed out that Europe will need to expand its defense industrial capacity to ensure that the core values of the region do not disappear.
Experts say Europe urgently needs tanks, artillery and infantry fighting vehicles for its ground forces, as well as air-to-air refueling support aircraft, cargo aircraft and anti-submarine warfare aircraft.
Among the companies likely to benefit from the rising costs are Leonardo, Airbus, BAE Systems and Rolls Royce Holdings.
After decades of underinvestment since the end of the Cold War, rearmament on this scale could take the continent more than 10 years. Business backlogs are growing, and aerospace and defense supply chains are already overburdened.
The region's smaller defense industrial base is unlikely to be able to supply everything needed in the short to medium term.
„Europeans may have to rethink some of their spending priorities as many of their budgets are already in question, but the scale of the threat is such that they cannot ignore it,” adds Ferguson .