The War Economy: Whither Europe?

Europe and France are not at war, but in recent years they have been faced with an accumulation of geopolitical dangers and challenges. The issue of the war economy has recently become a subject of public debate anew in order to convey that public policy objectives must shift their focus to military and economic security challenges. The features of the war economy as it is beginning to take shape do not resemble those that Europeans encountered during the two world wars. Today we are seeing some of the same immutable elements of the Cold War: higher defense budgets and fierce technological competition between major powers. The current situation also has some unprecedented characteristics. The interdependencies between the powers are much greater than during the Cold War and are being systematically “weaponized”. In such a context, the challenge for a European war economy is not simply to rebuild diminished military capabilities, but also to collectively regain strategic autonomy and innovative capacity. JEL classification: H41, H56, L64, N44.