Thierry Breton: A Game of Chance Between War and Debt

Europe is equipping itself, mainly in words, but also gradually in deeds. Thierry Breton has big plans for the future of European defence policy. Ideally, he would become Commissioner in a new defence portfolio to be created by Ursula von der Leyen after the elections. To do this, a lot of money is needed, which Brussels is clearly keen to find through the European Investment Bank and debt. It is in this context, but not only, that the current Ukrainian policy of the elites in Brussels and certain Member States must be seen. This war is necessary as a pretext for advancing authoritarian and centralist structures.

Germany's budget is tight. Finance Minister Christian Lindner has asked ministries to submit their savings proposals by mid-April. It is not known exactly how much is needed to present a clean plan for 2025. There is talk of a sum of between 15 and 25 billion euros.

Empty coffers

The pressure is on in Berlin, because in addition to the budget for 2025, the financial plan must also be drawn up for the period up to 2028. There are many obstacles, but one in particular is attracting a lot of attention: the special funding for the Bundeswehr, which is coming to an end.

In June 2022, Germany decided to create a special fund for the Bundeswehr. The aim of this special fund, with a volume of €100 billion, is to strengthen defence and alliance capabilities. [1] According to current forecasts, this special fund will be almost completely exhausted by the end of 2027. However, in Berlin, not only the Defence Minister but also the Finance Minister are aware that the defence budget must continue to grow - in order to meet NATO's objectives and to finance the many necessary investments in troops. This year, thanks to the special fund, over €73 billion is still available for the defence budget. But by 2028, this figure will have to rise to around €80 billion to meet the 2% target.

It is already clear that there will be a big gap when the last penny of the special fund has been spent. 20 billion, some say; 56 billion, says Der Spiegel magazine, referring to internal sources in the Ministry of Defence. [2]

This whole story can be discussed from various angles: firstly, there is the fact that Germany is facing an unprecedented budget scandal. This budget scandal is already causing serious damage to the country.

Secondly, the economic consequences will be felt in many European countries. Germany is by far the EU's biggest net contributor. And it is precisely now that Brussels needs a lot more money - for Ukraine, for migration, for the Green Deal, for economic aid (and interest on debts to that end).
Dangerous directions

The EU Member States have now agreed to set up a €5 billion aid fund for Ukraine, i.e. to continue the joint financing of arms, munitions and other military goods. It should be possible to increase this fund to €17 billion at current prices (€20 billion at 2018 prices) by 2027.

Thierry Breton, Commissioner for the Internal Market, appeared before the press on 5 March 2024 with his colleagues Margarethe Vestager and Josep Borrell to present their new thinking on the European defence industry strategy and the European Defence Industry Programme: by 2030, Member States should jointly procure 50% of defence equipment; by 2035, this figure should rise to 60%. Governments need to buy more military equipment from European manufacturers. Unfortunately, in Brussels they don't have much money for that. Between now and 2027, the Commission will only have €1.5 billion at its disposal, or around €500 million a year.

Breton, like his Congenial partner Josep Borrell, has no qualms about going for broke in this game of chance. He clearly dreams of becoming Defence Commissioner in the next legislature - a portfolio that Ursula von der Leyen has promised to create if re-elected. [3]

Which is why the European Investment Bank is mentioned in passing. As Bloomberg now reports, the EIB is said to be in talks with the EU executive and other stakeholders to invest in military companies producing defence equipment. EU heads of state and government are expected to discuss the EIB's role in defence preparedness at their meeting next week. [4]

Breton also stands by his proposal that the new Commission, which takes office in the autumn, should set up a €100 billion debt-financed defence fund. Where there is an existential crisis, there is also a path (of debt) in the EU," says Breton in essence.

Authoritarian traits

We can't say it enough and we'll insist on it: the call to pursue a common debt policy is getting louder and louder in Brussels. To justify this, one crisis after another is needed: the Covid-19 pandemic, the economic crisis, the climate crisis, the Ukrainian crisis, the energy crisis... It is precisely these crises, artificially created and insistently prolonged by those who lead them in Brussels and in the Member States, that provide the space and the opportunity for disastrous orientations.

On the one hand, these trends involve a blatant extension of authoritarian structures within the Union through the systematic abuse of the emergency clause. The powers and political room for manoeuvre of the Commission and the Council have been and continue to be massively extended without any link to democracy and without any international legal basis.

On the other hand, there is the common debt policy, which will clearly open the door to further centralisation of the European Union. The Member States' reserves of sovereignty are increasingly being ignored or circumvented.

It is in this context, but not only, that the current Ukrainian policy of the elites in Brussels and certain Member States must be seen. This war is necessary as a pretext for laying the foundations we have just mentioned.

This article was first published in: Le Courrier des Stratèges on March 15th, 2024
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