European Defence Readiness

TL;DR

This paper assesses Europe's military readiness using a validated economic model, highlighting critical capability gaps and the impact of systemic shocks like trade wars on future security stability.

Contribution

It introduces an empirically validated multi-sector model to evaluate European defence readiness and explores strategies to mitigate systemic shocks and capability gaps.

Findings

Systemic shocks exacerbate existing defence challenges.

Trade wars could significantly impair European security.

Targeted strategies can improve resilience and readiness.

Abstract

The preparedness and readiness of Europe is currently being challenged not only by Russia, but since recently also by its long-standing allies. In response to the evolving external security environment, the EU's White Paper on European Defence Readiness 2030 outlines the key defence issues in Europe - including critical capability gaps of forces, challenges of the defence industry such as fragmented defence market and military mobility. Leveraging an empirically validated general equilibrium multi-sector model with ambiguity and risk, this study assesses how prepared is Europe to address protracted conflicts and systemic shocks. Exploring what strategies could enhance European readiness, scenario analysis of a hypothetical total trade war imply that today's existing problems will only be amplified by systemic shocks, if not addressed timely and in a targeted way.