Europe has enormous economic and industrial potential, comparable to the United States and far greater than Russia’s, but due to a lack of political will and slow industrial mobilization, it has not turned this potential into a real defensive force to protect itself and Ukraine.
This was stated by Moritz Schularick, President of the Kiel Institute for the World Economy (IfW Kiel), during a discussion program of the project “Ukraine: On the Frontline of the Future,” organized by the Victor Pinchuk Foundation in Davos.
“If we look at the statistics, Europe’s GDP is ten times larger than Russia’s, and industrial output is six times higher. We produce more cars, tractors, and even airplanes than the United States. We are an extraordinary industrial power, but we lack the will to use it for our own military strength,” Schularick said.
He added that Europe and the U.S. have very similar economic resources, but Europeans are not deploying them properly to collectively defend themselves.
“And even today, our defense budget is only half of what the U.S. spends on defense. We have only a small fraction of American capabilities when it comes to defense,” noted the President of the Kiel Institute for the World Economy.
Commenting on Germany’s approach to current security challenges, he noted that after the fall of the Berlin Wall, the country was “extremely happy to reap the dividends of peace” and believed that a “new era of democratic prosperity” had arrived. According to Schularick, Germany was not alone in this naivety.
He emphasized that Germany has now changed its fiscal approach and increased defense spending.
“However, we need industrial mobilization, and it is currently proceeding slowly. Germany is Europe’s industrial cluster. We can produce 15,000 passenger cars a day, along with a lot of other equipment. But we have not yet begun to see this as an opportunity to strengthen the defense of both Europe and Ukraine… to shift these industrial clusters into the defense sector,” Schularick said.
