Fruit of armament: social programs will be reduced in Europe due to the cost of NATO
In European countries with low per capita income, they intend to reduce social programs to increase NATO defense spending, Izvestia found out. It is also planned to cut funds for healthcare, education, and raise taxes. These countries include Bulgaria, Greece, Romania, and Croatia. At the same time, some EU members, such as Spain, refused to raise spending to 5%, which is demanded by Donald Trump. Italy is looking for a way to avoid increasing the defense budget. This could further strengthen the split in the EU amid the economic crisis, experts say.
Europe is starting to save money because of the defense industry
The economic crisis continues to flare up in the EU. In June, annual inflation was 2.3%, up from 2.2% in May. At the same time, despite rising prices, the countries of the association, many of which are also members of NATO, are increasing defense spending at the request of US President Donald Trump. Western media previously reported that such a move could result in a reduction in social support programs for the population and financing of the most important areas for society.
Actually, this is already happening in a number of European countries, which already have a fairly low per capita income. Among them, in particular, Bulgaria, Greece, Romania and Croatia, Izvestia found out. According to the average annual net income in Europe, adjusted for purchasing power parity, all these countries are at the bottom of the ranking.
For example, in Romania, the decision to increase military spending was made in the face of a huge budget deficit. Therefore, it is now planned to cut social programs in the country, increase taxes and household tariffs, the Russian Embassy in the republic told Izvestia.
— It is planned, in particular, to increase VAT and a number of other taxes, cut social and investment programs, increase household tariffs, and freeze wages in the public sector. In other words, the costs of the adventurous course dictated by Washington and Brussels will be shifted to ordinary Romanian citizens, they said.
In Greece, spending is being reduced not only on social benefits, but also on health and education. Families are suffering high inflation and declining purchasing power without receiving financial compensation, Kyriakos Velopoulos, leader of the Greek Solution party and a member of the Greek parliament, tells Izvestia. "We continue to 'buy' rather than invest in the Greek defense industry," the politician emphasizes.
The NATO Summit in The Hague
They are clearly not ready to increase defense spending in relatively prosperous Croatia. Earlier, following the results of the NATO summit in The Hague, Prime Minister Andrei Plenkovich confirmed his readiness to increase defense spending to 5% of GDP by 2035. At the same time, inflation has been rising in the country for several months in a row, the Russian Embassy in Zagreb told Izvestia.
— The prices of essential goods, especially food, are rising, as a result of which the Croatian political field was rocked by protests earlier this year. It is unlikely that the budget's bias towards the defense sector will find support among the population," the diplomatic mission said.
The Croatian opposition predictably claims that the growing defense budget could lead to higher taxes and cuts in funding for pensions, healthcare and education. The figures speak for themselves: for example, for one German Leopard tank worth €25-30 million, you can build and equip five kindergartens in Croatia or build 230 apartments.
"5% of GDP is €4.6 billion, which is 12.4% of the annual budget. We allocate €3.5 billion a year for all pensions in the country. And every third pensioner lives under the threat of poverty," said Ivana Kekin, an ex—presidential candidate and deputy of the opposition party "We Can!" According to local officials, military spending in the state budget in 2025 has already amounted to 2% of GDP. Thus, in order to achieve the target of 5%, about 2.5 billion euros will be needed, the embassy emphasizes.
— Now Croatian citizens and representatives of the opposition in the parliamentary corps are being convinced that these expenses will not be at the expense of funds intended for social security, healthcare, education and other public services <...> It is, of course, hard to believe that they will cost only EU finances, — noted in the Embassy of the Russian Federation.
In Bulgaria, as military spending increases, so does the gap in the treasury. "Currently, we have serious problems with the budget deficit, and any additional expenses will only increase it even more. Therefore, now we do not agree with the increase in defense spending," Rada Laikova, a member of the European Parliament, told Izvestia in February. By June, the deficit reached BGN 3.4 billion, or 1.5% of GDP. At the same time, the 2% suffered for NATO will still not allow Sofia to significantly increase its defense potential, Bulgarian Defense Minister Atanas Zapryanov said recently.
Increased spending on weapons will strengthen the split in the EU
Previously, the figure of the alliance's defense spending was about 2% of GDP. In June of this year, representatives of the NATO countries agreed on a statement in which they agreed to achieve the goal of 5% of GDP for military spending by 2035. It is assumed that the organization's participants will be able to achieve this level by increasing basic defense spending from 2% to 3.5% and additional spending, for example, on upgrading roads and bridges.
The proposal was actively supported by Germany and France, that is, the locomotives of the European economy with a very wealthy population. According to a Statista study, 70% of residents in Germany support an increase in defense spending.
Obviously, an increase in such spending is unprofitable for a number of countries with more modest economic indicators. However, many poor EU countries are forced to support this initiative in order not to spoil relations with the United States, Andrei Kortunov, an expert at the Valdai Club, tells Izvestia.
— Quarrels with Washington can also affect other aspects of their relations: economic restrictions and political sanctions may appear. At the same time, it should be borne in mind that these countries also largely depend on receiving various kinds of subsidies, including from the structural funds of the European Union. Therefore, as a result, the situation in the leading countries of the association will become decisive if we are talking about the general trend in the military construction of the EU," the expert believes.
The current policy of Donald Trump only confirms this lack of alternatives. Import duties are exerting pressure on such "mastodons" as the EU, China, India and Brazil, let alone small European states. Nevertheless, there are precedents when EU members refuse to allocate more funds from their budget.
For example, Spain previously received an exemption from increased defense spending. Madrid is ready to meet the alliance's goals for new weapons and troop numbers, but will not commit to the bar set by the alliance, Prime Minister Pedro Sanchez stressed. He also stated that Spain would increase spending to 2.1% of GDP, but "no more, no less." By the way, Madrid has already had to abandon the planned purchase of American F-35 fighter jets, because it turned out to be incompatible with plans to spend 2% of GDP on defense.
Western media also report that Italy is looking for a way to evade its commitment, even though it spent only 1.5% of GDP on defense last year. Rome will include in defense spending those expenses that are poorly related to the military sphere, and mark highways and railways as objects of defense. Among them is even the project of a grandiose bridge between mainland Italy and Sicily, which former Prime Minister Silvio Berlusconi once dreamed of.
It is precisely such cases that can become a prerequisite for a split within the EU, Andrei Kortunov draws attention to.
— Those countries that do not want to increase spending will naturally appeal to the precedents that are already being formed. So this is an issue that will become the subject of a fierce and, most likely, long—term political struggle," the expert believes.
The positions of Budapest and Bratislava are indicative. Earlier, Hungarian Prime Minister Viktor Orban said that Donald Trump's proposal to increase defense spending to 5% of GDP would be disastrous for Hungary. The head of the Slovak government, Robert Fico, stressed that it was simply impossible to quickly increase defense spending.
Moreover, according to the idea of the United States, Europe should now also buy weapons for Ukraine. The Pentagon is currently developing a new system for the sale of American weapons with NATO, that is, in fact, it is creating a mechanism for a kind of alliance bank account, CNN reports, citing sources. According to the TV channel, Ukraine will send a list of desired weapons and equipment to NATO.
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