Europe needs a war economy

Maximilian Hess argues that Europe must stop treating Russia’s war against Ukraine as a looming threat when it is already eroding the continent’s foundations. With Donald Trump threatening to reduce US support and seeking to impose a disadvantageous settlement on Kyiv, Europe needs the capacity to fund Ukraine’s defence, strengthen its own defence industry and exert economic leverage over Moscow. The EU provided 18.1 billion euros toward the G7’s ERA loans in 2024 and finalised a new 90-billion-euro loan in April without a US commitment. Hess warns that internal EU divisions, particularly over measures to constrain Russia, could undermine the effort.