A New Priority for Europe

Europe is undergoing a quiet but profound shift in its political and budgetary priorities. With Readiness 2030, the new label for what was previously known as ReArm Europe, the European Union (EU) is preparing to channel nearly €800 billion into defence over the next five years. The initiative reflects a growing sense of urgency, particularly following Russia’s invasion of Ukraine and increasing doubts about long-term US military support. Germany, Poland, and the Baltic States are among the most vocal proponents of this new course. Yet while defence is moving to the centre of the EU agenda, concerns are mounting over what this shift might mean for Europe’s longstanding commitment to social investment and cohesion.

Exceptional Rules for Exceptional Times

To enable this surge in defence spending, the EU has made an important change in loosening its fiscal rules that normally keep national deficits in check. As of 2025, member states are allowed to spend more on defence, even beyond 1.5% of GDP, without facing the usual penalties under the Stability and Growth Pact. Germany, for example, plans to more than double its military budget by 2029. While similar flexibility was used during the COVID-19 pandemic to support public health and recovery, its targeted use for defence signals a clear shift in political priorities.

This change is not merely technical, as it raises serious questions about what is considered worthy of exceptional treatment. If war justifies bending the rules, why not the climate crisis, healthcare systems under pressure, or deepening educational inequalities? Critics argue that such choices are never neutral, as they reflect a vision of society. The concern is that military capacity is being prioritised without a corresponding effort to protect and strengthen social infrastructure.

Economic Prospects and Pitfalls

Advocates of Readiness 2030 point to its potential to boost innovation, create jobs, and develop critical industries. The hope is that investment in defence will spill over into broader industrial and technological progress. But this is far from guaranteed as there is a risk of fragmentation if countries focus on supporting their own defence sectors instead of coordinating at the European level. So-called “procurement nationalism” could lead to duplication, inefficiencies, and unequal benefits across member states.

Moreover, the industrial returns from such spending are likely to concentrate in a few countries with established defence industries. Without mechanisms to ensure geographic balance or fair distribution of contracts, there is a danger that cohesion between regions and member states will weaken further.

The Social Cost of Rearmament

Perhaps the most contentious aspect of this new direction is the potential impact on Europe’s social spending. While some governments insist that social budgets will remain untouched, there are already signs that cohesion and recovery funds might be redirected to support military goals. For trade unions and social actors, this raises the alarm of a new austerity moment, one in which social priorities are again pushed aside.

Worryingly, the strategy offers no binding social conditions. There is no requirement for decent wages, local reinvestment, or protection of vulnerable groups. Without safeguards, public money may support profit-driven defence ventures with little benefit for workers or communities. For a Union founded on solidarity, this would mark a troubling departure.

Governance and Accountability Gaps

Despite the scale of the planned spending, transparency remains limited. Much of the funding will come through national budgets or special off-budget funds with minimal parliamentary scrutiny. Germany’s €100 billion defence fund, for instance, is managed outside the normal budgetary process. This undermines democratic oversight and risks fuelling mistrust at a time when trust in institutions is already under strain.

The EU’s role in coordinating and supervising these funds also remains weak. While the Commission promotes a narrative of shared resilience, real decision-making power rests largely with national capitals. As a result, the ambition for a united and efficient European defence capability could be compromised by fragmented implementation.

Are Welfare and Defence Compatible?

Is it inevitable that welfare and defence will compete for limited resources? Not necessarily. But making them compatible will require clear policy choices. Joint procurement, stronger EU-level coordination, and mechanisms to assess the social impact of defence spending could help ensure that one priority does not come at the cost of the other. Some have proposed new sources of EU revenue, such as environmental or digital taxes, to relieve pressure on national budgets. Others argue for stronger conditionalities to make sure public investment serves both security and inclusion.

Defining Europe’s Future

Negotiations over the EU’s long-term budget are testing the Union’s ability to balance strategic autonomy with social cohesion. Without concrete measures to protect social spending, divisions between more affluent and more vulnerable member states may deepen. The risk is not only economic imbalance, but also a fundamental erosion of the Union’s founding principle of solidarity. If the EU is to emerge as a more capable geopolitical actor, it must avoid equating security solely with military capacity. A stronger Europe requires robust defence, but also resilient societies, as true security cannot be built without social cohesion, democratic accountability, and shared prosperity.