It was always a pipe dream to expect that ramped-up defense spending would not eat into other budgetary items. It was always clear that more bombs would mean less hospital beds and would permanently embed austerity in state budgeting.
For high-tax, high-spending states, with no monetary sovereignty and high levels of public indebtedness, as is true for almost all of the European Union’s member states, budget constraints are hard indeed. Taxes cannot be raised with impunity; debt financing quickly spirals out of control through the doom loop of rising interest rates; while cutbacks on cherished items such as education, welfare, health care, and public housing come with high political costs.
This was, however, precisely what the Netherlands’ political leaders hid from voters, during the first of a series of elections held in Europe under the shadow cast by the new Donald Trump military-spending norm. Since the NATO meeting in The Hague last June, almost all member states are committed to splurging 5 percent of GDP on the military and related costs.
In the Dutch elections last October 29, there were many issues that required urgent political attention: health care, infrastructure, an unsolved nitrogen crisis, a stalling green transition, a housing crisis, the soaring cost of living, and declining political trust. In truth, amid rising political fragmentation and right-wing populism, the campaign was dominated by migration: many blame all social ills on the influx of “refugees,” whose imagined numbers are widely inflated.
Yet noticeable for its absence was any serious discussion of the long-term budgetary consequences of the Trump norm. After all, this boils down to a near doubling of annual defense spending from €22 billion in 2025 to well over €40 billion in 2035, by which point it is meant to have reached 3.5 percent of GDP. In an economy with a size of approximately €1 trillion and state expenditure to the tune of half of that, these are sizable…
Auteur: Ewald Engelen
