Europe’s €800 billion gamble: Austerity and debt l Josef Bugeja

In a moment of economic strain, where citizens across Europe struggle with inflation, housing shortages, and overstretched public services, the EU is hurtling towards an arms race that threatens to further endanger its social model.

With plans to inject €800 billion into military rearmament, Europe risks trading-in its historic commitment to peace for an illusory sense of security, all while eroding the very fabric of its welfare state. This trajectory must be stopped before it leads to an era of austerity and instability that will scar the continent for generations.

European leaders, encouraged by nations whose borders are closer to Russia and other militarised member states, as well as European Commission President Ursula von der Leyen, are calling for a dramatic expansion of the continent’s military capabilities. It is a response, we are told, to growing threats from Russia, but chiefly to an increasingly isolationist United States and the broader uncertainties of a shifting geopolitical landscape.

Yet, the urgency with which this rearmament is being pursued is alarming, not least because it diverts billions away from social welfare, education, and healthcare, the very pillars of European stability.

The idea of a well-armed, self-sufficient Europe sounds compelling. EU member states find themselves having to increase their manpower by recruiting massive numbers of new soldiers to offset a declining US military commitment in Europe. Most importantly, they must meet the challenge of building a unified deterrent that brings together greater and better investment in technology, more joint procurement, and efficient spending in actual defence needs – all this with the added challenge of there being no single EU military command.

And yet, whatever shape or form this deterrent might take, Europe’s much-vaunted ‘rearmament’ is not necessarily a guarantee of security. Rather, it may pull us closer to conflict, with billions spent on arms, which would trap future generations in long years of public debt. An arms race serves only the interests of defence contractors and geopolitical hawks.

For those of us who have lived through cycles of European economic downturns, the financial burden of such rearmament is clear. The so-called “peace dividend”, which allowed European nations to reinvest defence savings into public infrastructure after the Cold War, will vanish. The Financial Times notes that years of relatively low military spending had been a key factor in Europe’s ability to sustain strong welfare programmes. With an additional €800 billion now earmarked for defence, social spending will inevitably bear the brunt of austerity cuts.

And who will pay for this militarisation? The answer is, as always, the working and middle classes.

It is no surprise that trade unions across Europe are deeply sceptical. Public sector workers in France, Belgium and Romania already face pay freezes and pension reform battles. In Italy, healthcare services are strained beyond capacity. In Spain, teachers are protesting budget cuts. And yet, at a time when governments claim they have no funds to alleviate these crises, they miraculously find hundreds of billions for weapons, tanks, and military expansion. This is not security; this is economic recklessness.

In contrast to this growing militarism, Malta stands as a rare European voice advocating for peace. Malta’s stance is not one of naivety, nor is it a refusal to engage with the realities of global security. Rather, it is a principled recognition that diplomacy, de-escalation, and neutrality remain the best tools for stability.

Neutrality is not weakness. It is a commitment to peace in an era where conflict is becoming the default policy choice. It is no mere accident of history that it was GWU Secretary General George Agius who on 31 March, 1979 walked up with then Prime Minister Dom Mintoff to light up the torch on the Freedom Monument. This was the culmination of the journey that saw Malta becoming independent, a republic, and then relinquishing its military ties to the UK and other Nato forces, to start a journey towards national development. The GWU, born out of a workers’ struggle that started in the dockyard that served the British navy, was at the heart of this path to liberation.

Malta has historically played a role in bridging divides, and it should continue to use its diplomatic channels to advocate for dialogue rather than submit to the logic of rearmament.

A Europe that truly seeks security should be investing in peace-building efforts, conflict resolution, and economic cooperation – not preparing for a fruitless war of attrition or, worse still, the prospect of unleashing nuclear war.

There is still time to change course. European citizens must demand that their governments resist the pressure to prioritise arms over people. Instead of ploughing €800 billion into military expansion, we should be strengthening the institutions that make Europe a beacon of stability: Universal healthcare, strong public education, social housing, and research into green energy. These are the true guarantees of security in the 21st century.

Will we choose to uphold the values that made this continent a model of prosperity and peace, or will we revert to the militarised past that left devastation in its wake?

The answer must be clear. We must resist this drive towards rearmament and demand a Europe that invests in people, not war. On this front, Malta must stand firm, as it always has, on the side of neutrality, diplomacy, and peace.