« War economy »: The peace mentality of Europe changes? – The world

There is no official definition of « war economy », but there are many indicators. The war economy means that the state has mobilized its resources, production capacities and work force to support military preparation and production before war or during the war. The most obvious economic change is to move industrial production from consumer goods to weapons, ammunition and other military equipment.

In addition to traditional military hardware, modern weapons requires investment in technology and digital services such as software, satellite systems, satellite systems and reliable internet, Peni us, public policy experts in the American Nemack Marshall Fund.

In order for all these governments, centralized state control of the necessary industries and resource redistribution increases. This control allows governments to give priority and redirected raw materials in industry and goods associated with war. Other things such as fuel or foods can be rated to give priority to the military.

Who benefits from the war economy?

« In a real war economy, all elements of society are reoriented on the defense of the fatherland, » he tells us. This reorientation is expensive and there is usually a great increase in public spending to pay all this. This can lead to greater borrowing, inflation, tax increases and less money for social expenses.

Armin Steinbach Associate The Brussels Analytical Center for Economics, Professor at HEC in Paris, claims that large winners of the company are focused on military products, digital technologies, information and intelligence, pharmaceutical and medical technology. « Turning war economies can be a catalyst of scientific and technological progress, » said Steinbah for DW. « New communication systems, jet engines, radars, intelligence advances bring benefits – and these technologies affect other industries. »

Switching to a war economy

The transition from civilian economy can happen slowly or quickly depending on the situation. During the Second World War, Germany had an advantage because she knew she would attack and worked on preparations. The United States, the United Kingdom and other allies were late with the answer so they had to be feverishly looking for him.

Today, Russia and Ukraine are in similar situations. Russia significantly increased military spending, intensified the production of goods intended for the military and introduced capital control to slow down the departure of money from the country. Inflation has increased, and the government has increased public spending to maintain the civilian economy.

The poorer Ukraine is in a much more worse situation. Since the Ukraine is the one attacked, fighting for survival and invests much more in war efforts. Ukraine today consumes 58 percent of its budget on military expenditures, he noticed Steinbah.

Like Russia, Ukraine has mobilized manpower, which has threw many experienced workers from traditional production. At the request of the Government, many factories were rearranged to produce weapons and ammunition.

Other countries in war economy mode

There are a number of other countries that are some extent in the war economy regime due to military conflicts that are underway. Among them myjan, Sudan and Yemen, where the angry civil wars. Conflicts in Israel, Syria, Ethiopia and Eritrea also led to economic disorders because the governments are focused on military efforts.

Israel has increased its defense expenditures. Many workers were recruited to fight and were thus thrown from the civilian labor market. In order to pay for this, the government has increased value added tax (VAT), utility prices and property taxes.

The European Union is ready to arm again

The EU has recently launched due to weakening US support Ukraine, NATO and Europe in general. After decadesign American support, the US administration under Donald tramp is approaching Russian President Vladimir Putin. This was especially worried about European countries that were trusted in Transatlantic Security Guarantees.

NATO members – 23 of which are part of the European Union – they barely managed to set aside two percent of GDP defense. Now, even this percentage is not considered sufficient.

The President of the European Commission Ursula Fon Der Laen announced 4. Marta defense plan « re-arm Europe » (Rearm Europe). A plan worth 800 billion euros aims to strengthen EU military capacities. It includes a total of 150 billion euros to EU member states. In addition, giving strict regulations on the budget deficit will enable countries to spend more, which could lead to another 650 billion euros of military spending in the next few years.

Germany willing to increase military investment

For his part, Germany stepped on that field by approving new budget rules in Bundestag. In the future, the government will be freestly to invest in defense as most consumption related to it will no longer be limited to the fiscal deficit rules. This step was so great that he demanded a change in the Constitution of the Earth and could mean a true concussion for the continent’s security policy.

Penny believes us that the European level requires better access to energy and more coordination, in order to eliminate the neutral of national defense capabilities. Joint procurement and joint research and development should reduce costs. « At the political level, there is a lot of talk about increasing military capacities of Europe, but it is in a very early stage, » explains us. « Europe started from a strong position, with strong fiscal resources and production capacities ».