{"id":317954,"date":"2026-07-06T12:00:46","date_gmt":"2026-07-06T11:00:46","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=317954"},"modified":"2026-07-04T17:41:50","modified_gmt":"2026-07-04T16:41:50","slug":"are-europes-leaders-ignorant-or-are-they-lying","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2026\/07\/are-europes-leaders-ignorant-or-are-they-lying\/","title":{"rendered":"Are Europe\u2019s Leaders Ignorant \u2014 or Are They Lying?"},"content":{"rendered":"

No study has ever shown that military spending outperforms civilian investment.<\/em><\/p><\/blockquote>\n

European leaders now speak openly about transforming Europe\u2019s economy into a war economy. This is not a metaphor. It is the stated ambition of governments, EU commissioners, and NATO officials. Denmark\u2019s DIIS writes explicitly that Europe must \u201cprepare for a wartime economy,\u201d and similar language appears in speeches from Paris, Berlin, Warsaw, Helsinki, and Brussels. The political narrative is clear: rearmament is not only necessary for security, it is also good for jobs, innovation, and growth.<\/p>\n

But when examined through the lens of economics rather than geopolitics, this narrative collapses immediately.<\/p>\n

For more than fifty years, peace\u2011economics researchers such as Seymour Melman, Emile Benoit, Mary Kaldor, and Lloyd J. Dumas\u00a0demonstrated that military spending delivers lower economic returns\u00a0than civilian investment. Their work showed that weapons production is structurally low\u2011employment, low\u2011consumption, and low\u2011multiplier. A euro spent on health care, education, infrastructure, culture, or green transition produces more jobs, more income, and more domestic demand than a euro spent on weapons. This was not controversial among economists; it was simply inconvenient for politicians.<\/p>\n

Half a century later, the empirical picture is even clearer. The most rigorous modern analyses of defence spending come not from defence ministries or security think tanks, but from central banks\u00a0and commercial banks. The European Central Bank warns that defence spending has \u201cmodest short\u2011term output effects\u201d and that high import content reduces domestic impact. The IMF finds that military expenditure stimulates activity only under narrow conditions that civilian sectors meet far more easily. Nordic banks \u2014 Nordea, SEB, Danske Bank \u2014 all note the same pattern: defence spending is capital\u2011intensive, import\u2011heavy, and dominated by large corporate actors, with limited spillovers to the broader economy.<\/p>\n

In other words: the economic verdict is unchanged. Civilian investment outperforms military spending every time.<\/p>\n

\"\"<\/a>

AI-generated illustration from Magnific<\/p><\/div>\n

Yet Europe is now undertaking the largest rearmament since 1945. Defence budgets are rising to 2 percent of GDP as a minimum, 3 percent by 2028, 3.5 percent by 2030, and NATO\u2019s new long\u2011term target of 5 percent by 2035. This is the biggest reallocation of public resources in modern European history. And still, there is no serious economic debate about what this means \u2014 no discussion of opportunity costs, no modelling of long\u2011term productivity losses, no assessment of welfare impacts, no analysis of who benefits and who pays.<\/p>\n

The silence is striking. Across Europe, not a single major research institute\u00a0has produced a study comparing the economic multipliers of military and civilian spending. Not FOI in Sweden, DIIS in Denmark, NUPI or FFI in Norway. Not PRIO in Oslo, despite its long tradition of peace research. Not SIPRI in Stockholm, despite its global reputation for defence\u2011industry analysis. Not DIW Berlin, Ifo Munich, or the Kiel Institute. Not France Strat\u00e9gie or CEPII. Not Bruegel in Brussels, CPB in the Netherlands, Chatham House in the UK, or IAI in Italy. Even the European Commission, the European Defence Agency, the European Investment Bank, and the European Court of Auditors have never examined whether military spending is economically inferior to civilian investment.<\/p>\n

Europe produces threat assessments, capability roadmaps, and geopolitical narratives \u2014 but not\u00a0the basic economic analysis required to justify the largest shift in public spending in decades. The absence is not accidental. It is structural.<\/p>\n

Meanwhile, the market structure of weapons production makes the economic picture even worse. Arms manufacturing operates as a monopoly, with the state as the sole buyer. This eliminates normal market mechanisms such as price competition and consumer choice. Cost overruns become routine, because manufacturers know governments cannot walk away once a project has begun. The F\u201135, the Eurofighter, the Patriot system, and nearly every naval vessel built in recent decades have ended up costing multiples of their original estimates. In economic terms, the arms market is designed to produce inflated prices and inefficient production \u2014 all paid for by taxpayers.<\/p>\n

Even more troubling is the forgotten history of conversion. In the 1980s, serious studies \u2014 including a major UN project led by Sweden\u2019s Inga Thorsson \u2014 demonstrated that military industries could be converted to civilian production with far greater economic and social returns. Conversion was technically feasible and economically rational. Today, Europe is doing the opposite: converting civilian production into military production. Yet no government, no EU body, and no economics institute has studied what this reverse conversion requires or what it will cost.<\/p>\n

Europe is drifting toward a war economy without analysing the economic consequences. The political will to militarise is strong. The economic analysis of militarisation is absent.<\/p>\n

So we return to the question that frames this entire debate: Are Europe\u2019s leaders ignorant \u2014 or are they lying?\u00a0Do they genuinely not understand the economics of military spending, or do they understand it perfectly and choose to mislead their citizens, taxpayers, and voters?<\/p>\n

Either answer is deeply troubling. But one of them must be true.<\/p>\n

A full two\u2011part report examining these issues in depth will be published shortly. It presents the evidence behind every claim made here \u2014 and the economic reality Europe\u2019s leaders refuse to confront.<\/p>\n

Read Part 1 here<\/a><\/p>\n

Read Part 2 here<\/a><\/p><\/blockquote>\n

__________________________________________<\/em><\/p>\n

\"\"<\/a> Prof. Jan Oberg, Ph.D. is director of the independent <\/em>Transnational Foundation for Peace & Future Research-TF<\/a>F<\/a> in Sweden and a member of the <\/em>TRANSCEND Network for Peace Development Environment<\/a>. CV: <\/em>https:\/\/transnational.live\/jan-oberg<\/em><\/a>
\n<\/em>https:\/\/transnational.live<\/em><\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

No study has ever shown that military spending outperforms civilian investment. European leaders now speak openly about transforming Europe\u2019s economy into a war economy. This is not a metaphor. It is the stated ambition of governments, EU commissioners, and NATO officials.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[1817,2914,1161,1104,3946,2797,1253,1268,3530,1594,1073],"class_list":["post-317954","post","type-post","status-publish","format-standard","hentry","category-editorial","tag-anti-militarism","tag-anti-nato","tag-arms-industry","tag-arms-trade","tag-catastrophe-capitalism","tag-culture-of-war","tag-demilitarization","tag-european-union","tag-military-capitalism","tag-war-economy","tag-weapons"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/317954","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=317954"}],"version-history":[{"count":5,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/317954\/revisions"}],"predecessor-version":[{"id":318009,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/317954\/revisions\/318009"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=317954"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=317954"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=317954"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}