Nato versus PESCO: Economic aspects

Abstract

The article is devoted to economic consequences of the demands of the U. S. President Donald Trump to European NATO allies to increase defense spendings in the context of intensified European defense cooperation (in particular, the implementation of the PESCO initiative). Within NATO, a line of tension “West-East” or “old-new members” has been identified, due to both economic (the size and level of the economies’ development) and political (attitude to the USA as a guarantor of security) reasons. European states have committed to increase spendings both within NATO (defense investment pledge) and within PESCO. On the one hand, the development of the European defense identity and the growth of defense spendings will in any case serve to strengthen the overall NATO capabilities. On the other hand, in the medium and long term these measures are unlikely to lead to real strategic autonomy of Europe, although they are aimed at strengthening support for the military-industrial complex of the largest European states. The U. S. considers such policy as a challenge, given that American defense contractors have traditionally been involved in the distribution of defense orders in Europe (while the U.S. market is nearly closed for European companies). Under conditions of growing uncertainty and the crisis of globalization, support for defense industry enterprises can create additional impetus for internationalization of this economy sector, without which European products are unlikely to remain competitive in the global arms export market. The analysis shows that France as a country with one of the most technologically advanced military-industrial complexes will be the main “motor” and, most likely, the beneficiary of strengthening defense cooperation in Europe. Moreover, an additional factor of French ambitions may be a significant share of state participation in the defense sector of the economy and, in general, the strongest (in comparison with Germany and the UK)“national link” of the industry.