Key European countries may need to double defense spending to meet the challenge of Russia’s aggression in Ukraine
How would a doubling effect Europe’s cushy health care, educational, and retirement systems?
Many European nations have severe demographics that raise the monies to support their seniors. Will they have to borrow via national debt?
https://www.reuters.com/world/europe/poland-leads-nato-defence-spend-can-it-afford-it-2024-10-23/
Poland leads NATO on defence spend - but can it afford it?
Poland’s NATO-leading surge in defence spending is raising budget concerns because it will bake in higher long-term expenditure on its military – even as Warsaw concedes it faces revenue shortfalls in its budget this year.
“Poland’s acquisition of new military platforms at scale will lead to significantly higher costs to maintain this equipment over the long-term,” Seamus P. Daniels, a fellow at the Center for Strategic and International Studies said of Poland’s equipment purchases, including from U.S. and South Korean suppliers.
Citing Pentagon figures, he said operating and sustainment expenses account for 70% of a military system’s lifetime cost on average - essentially committing Poland to spending billions more on its newly acquired equipment.
Acquisition cost of a modern weapon system is just a down payment. Which is why the US naval fleet & air fleet are shrinking. Are the new systems twice as effective?
Polish debt levels of around 50% of GDP are much lower than in euro zone members France and Italy. However, it is unclear how far Poland could ramp up borrowing before financial markets start pushing up borrowing costs, or spreads on government bonds widen.