“When you look at everything we adopted today, it’s almost unbelievable how quickly a new fund exclusively for defense financing—worth €150 billion—is being created,” was the commentary at the emergency summit of EU leaders.
Most were stunned by the speed and ease with which “funds” worth hundreds of billions are conjured out of thin air in Brussels. Isn’t it wonderful? We won’t give up anything, and yet we suddenly have new money for defense?
Not quite. Let me say from the outset—I understand the necessity of increasing defense spending. European countries have, over the past decades, completely neglected their primary and fundamental duty. The question isn’t whether EU states should increase defense spending, but where the money should come from.
Imagine that your household suddenly faces a new expense, an unforeseen cost you can’t avoid. What would you do? Either increase your income or cut other spending. There’s always a third option—borrowing—but while it may seem the easiest, it’s actually the most expensive. If you borrow, you’re not just paying for the new expense—you’re also paying interest on top of it.
So, you’d have to choose: either work more to earn extra income or cut unnecessary spending to save for the new cost.
Politicians operate differently simply because they don’t spend their own money—they don’t have to earn it. Governments could find the money for defense. They could, for example, reduce social programs, eliminate subsidies to private sectors, and cut donations to NGOs. Just doing that would already save over €150 billion annually at the EU level.
But that would create problems for the politicians themselves. Segments of the public—those who rely on state aid and subsidies—would protest, frame it as a scandal and a threat to the public interest (everyone losing privileges tries to present it as a threat to the common good). That would bring serious political trouble to any government daring enough to go that route—even though it would be the fairest and least painful solution for society. In some countries, it could even topple the government.
So, politicians won’t do it. Instead, they choose the politically profitable path—create a new “fund” out of thin air, which means ordering the ECB to print €150 billion a year. From this fund, they’ll draw money to spend on defense. We already saw how this worked during the COVID pandemic, and politicians loved it, so now they’re clearly seeking every opportunity to repeat the trick, because it gives them power. When large amounts of new money are printed, the most powerful are those closest to the source—those who distribute it and decide where it flows. That’s them. Inflation gives them power.
So, if a politician has to choose between an honest method that causes them discomfort but minimal harm to society, and a corrupt method that makes them look like a savior and brings them power and potentially wealth—it’s not hard to see why they choose the second.
But that second option is the worst for the general population. They’ll print new money, which we’ll later pay for through inflation and rising prices. And when that happens, politicians will again claim it has nothing to do with them—it’s all “because of Putin, the war, and greedy corporations.”
The ease with which European leaders unanimously approve the creation of massive new funds is deeply concerning, because it shows how popular inflationary policies have become. We must ask: what is so flawed in our electoral system and voting base that such reckless financial policies go unpunished and without loud opposition?
If governments had opted for budget cuts to cover the needed defense spending, society wouldn’t be poorer overall. A portion of the population would be affected, at least temporarily, but the total wealth of the nation wouldn’t shrink. Inflation, on the other hand, will impoverish entire nations, entire societies—and a poorer Europe will not be stronger. This is counterproductive for defense and especially for any long-term security of the continent.
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