The Finance of Deterrence

Deterrence is not merely a matter of strategy and doctrine; it is a question of sustained financing. The war in Ukraine has revealed that Europe’s defence budgets, even when nominally large, often fail to translate into readiness, production, or sustained operational capacity. The problem lies in the structure of expenditure, not only in its scale. For decades, European governments have allocated funds episodically, responding to crises rather than maintaining a stable flow of investment. Such a pattern breeds inefficiency, discourages industry from expanding capacity, and prevents the accumulation of strategic reserves. Deterrence requires the opposite: predictable, long-term financing mechanisms that ensure continuous output regardless of political cycles. A credible defence posture is a financial architecture as much as a military one. The challenge for Europe is to align its fiscal governance with the requirements of permanence, replacing reactive spending with institutionalized commitment.