Can Europe stand without the US?

Summary

Podcast Summary: The Indicator from Planet Money – "Can Europe Stand Without the US?"

Release Date: March 26, 2025

Introduction

In the episode titled "Can Europe Stand Without the US?" hosted by Paddy Hirsch and Adrienne Ma, The Indicator from Planet Money delves into the evolving dynamics of the transatlantic defense relationship. The discussion is sparked by leaked communications within the Trump administration, revealing a contentious stance toward European allies and igniting a broader conversation about Europe’s quest for military independence from the United States.

Trump Administration's Stance on European Defense

The episode opens with revelations from a leaked group chat involving Vice President J.D. Vance and Defense Secretary Pete Hegseth. In this exchange, Vance expresses frustration with repeatedly bailing Europe out, stating, “I just hated bailing Europe out again” (00:14). Hegseth reinforces this sentiment, declaring, “I fully share your loathing of European freeloading. It’s pathetic” (00:14). These remarks highlight a significant shift in the US approach towards its European allies.

Former President Donald Trump’s critical views on NATO and European defense spending are prominently featured. At 02:55, Trump is quoted saying:

“Well, I think it's common sense, right? If they don't pay. I'm not going to defend them. No, I'm not going to defend them. I got into a lot of heat when I said that. He said, oh, he's violating NATO. And, you know, the biggest problem I have with NATO, I really, you know, I mean, I know the guys very well, they're friends of mine. But if the United States was in trouble and we called them, we said, we got a problem. France, we got a problem. A couple of others I won't mention. Do you think they're going to come and protect us? They're supposed to. I'm not so sure.”

This candid admission underscores Trump’s skepticism about European nations honoring their defense commitments under NATO’s Article 5.

European Response: Ramp-Up in Defense Spending

Contrary to Trump’s expectations, Europe has been proactively enhancing its defense capabilities. Adrienne Ma notes that European leaders are formulating a "rearmament plan aimed at decoupling Europe from the US and lowering its reliance on America for weapons and security" (00:51). Ursula von der Leyen, President of the European Commission, emphasized the necessity for Europe to be prepared for potential conflicts, declaring, “If Europe wants to avoid war, Europe must get ready for war” (00:51).

Fenella McGurdy, a senior fellow for defense economics at the International Institute for Strategic Studies in London, provides insights into Europe’s escalating defense expenditures. She states, “In 2024, we saw record defence spending growth, already 11.7% in real terms, and that was itself an increase. So an acceleration from the level of growth we saw in 2023, which reached 5.2%. And that was an acceleration from the growth the year before” (04:32). This surge culminates in the EU’s ambitious plan to allocate $866 billion towards military spending over four years, a figure comparable to the US’s annual defense budget (04:51).

Branislav Slantshev, a military and war studies professor at the University of California, San Diego, comments on Europe’s industrial capacity: “The European manufacturing base is astonishing. It can produce high precision machinery. It has all sorts of talent. If it's done right, it should generate economic benefits for these countries. And so that should alleviate some of the problems that Europe has been struggling with” (05:15).

Funding and Economic Implications

The financial commitment required for this defense ramp-up necessitates significant economic adjustments. Fenella McGurdy explains that European nations are compelled to incur additional debt and restructure their debt laws to fund the increased military spending. For instance, Germany recently approved historic changes to its debt laws to allow more borrowing for defense, followed by similar moves in Denmark (05:53). These measures, while facilitating immediate defense funding, pose risks of ballooning deficits and potential inflationary pressures.

Industrial and Supply Chain Challenges

A major hurdle for Europe’s defense independence is the current dominance of the US in its military supply chains. As Adrienne Ma outlines, “Right now, the US dominates Europe's military supply chain. It provides rocket launcher systems and artillery shells and fighter jets to European forces” (06:38). Transitioning away from this reliance involves sourcing new suppliers both within Europe and globally, a process fraught with logistical complexities.

An unnamed expert elaborates on the necessity for cohesion: “It will really be key to ensure that there is that cohesion across Europe and including countries that aren't in the EU, looking at how to work with NATO, coordinating the demand across industry to make sure that everyone isn't demanding the same thing at the same time, creating competing demands for the same resources and creating those further supply chain issues” (07:06). Additionally, Branislav Slantshev warns that even with increased funding, establishing new supply chains and production lines is a long-term endeavor, likely taking years to materialize (07:39).

Technological Evolution and Future Needs

The nature of military threats is rapidly evolving, compelling Europe to adopt cutting-edge technologies. Branislav Slantshev emphasizes the need to move beyond traditional military assets:

“Everything is changing right now. This current war Things have evolved dramatically. Initially, for instance, everybody was talking artillery in tanks. That was a big thing. Then the tanks turned out not to be super effective. Now everything is drones and the missiles, right? And everything that is related to how you can keep electronic warfare from the interference. Do you have eyes in the sky? So the satellites. So these are the kind of capabilities we should not be building to fight the last three wars, we should be building to fight the next one” (08:08).

This shift necessitates substantial investment in new technologies and the phasing out of outdated systems.

Timeline and Feasibility

Building a self-reliant European defense infrastructure is not an overnight task. As Branislav Slantshev notes, “It will be years. These are all future investments that will take two to three years to start seeing some significant changes for sure” (07:39). The strategic redirection requires careful planning to align investments with emerging threats, a challenge compounded by the unpredictable nature of global military dynamics.

Future Outlook and Continued US Dependency

Despite Europe’s determined efforts, complete military independence from the US remains uncertain in the near future. An unnamed expert highlights the enduring reliance on US capabilities, especially in areas like heavy lift transport:

“It takes decades for a lot of these programs. So I think that there's some level of dependence will always be there, certainly in things like heavy lift transport and things like that, because those capabilities do take time to develop. And I think Europe could get there, but not perhaps in the timeframe it needs. So there's always going to be some level of reliance on the US and hopefully some partnerships going forward, which ultimately is good for US defence industry as well” (09:04).

Moreover, the US’s strategic pivot to Asia, particularly in response to China’s rise, underscores the necessity of maintaining strong European alliances. Paddy Hirsch concludes:

“Partnerships. Because in future it won't just be Europe relying on the us. America's withdrawal from Europe is part of a pivot to Asia that began under the Obama administration, whether President Trump likes it or not. As the US continues to square up to China, it will need allies. It will need Europe, just as it did after 911 when it asked for help and got it” (09:31).

Conclusion

"The Indicator from Planet Money" episode "Can Europe Stand Without the US?" provides a comprehensive analysis of the shifting defense dynamics between Europe and the United States. While Europe is making significant strides towards military independence through increased spending and industrial investment, numerous challenges—ranging from funding constraints to supply chain complexities—impede rapid progress. Additionally, the evolving global security landscape and the enduring strengths of US-European partnerships suggest that complete military autonomy for Europe remains a long-term objective rather than an immediate reality.

Transcript

[Unknown Speaker]

Npr.

[Paddy Hirsch]

This is the indicator from Planet Money. I'm Paddy Hirsch.

[Adrienne Ma]

And I'm Adrienne Ma. This week, more evidence surfaced of the Trump administration's axe to grind with Europe. It came from a leaked group chat with texts From Vice President J.D. vance and Defense Secretary Pete Hegseth. In this conversation, they're discussing whether to launch a military strike on Houthi rebels in Yemen, which have been disrupting commercial shipping in the Red Sea. Vance said he just hated bailing Europe out again. Hexseth replied, quote, I fully share your loathing of European freeloading. It's pathetic. All of this means that things are getting real in Europe.

[Branislav Slantshev]

If Europe wants to avoid war, Europe must get ready for war.

[Paddy Hirsch]

This was European Commission President Ursula von der Leyen speaking at the Royal Danish Military Academy last week. At the same time, European leaders were working on a rearmament plan aimed at decoupling Europe from the US and lowering its reliance on America for weapons and security.

[Adrienne Ma]

So today on the show, we'll ask what Europe needs to do to stand alone militarily without America, how long that might take and what the barriers could be. That's coming up after the break.

[Unknown Speaker]

Support for this podcast and the following message come from Spectrum Business working to power businesses nationwide with reliable connectivity services When Emily and Mike decided to start a custom shoe design store in Charlotte, North Carolina, they knew the road ahead wouldn't be easy. They dreamed of creating a fun, inspiring environment to promote self expression. But they knew they couldn't achieve their vision without reliable Internet. So they chose Spectrum to help them stay connected and to keep important tools like cloud based design programs running smoothly. And as they grew, offering workshops, custom designs and more. Spectrum was there every step of the way with flexible pricing and dedicated 24. 7 service. Learn [e-mail] business restrictions apply services not available in all areas. This message comes from Charles Schwab. When it comes to managing your wealth, Schwab gives you more choices like full service, wealth management and advice when you need it. You can also invest on your own and trade on thinkorswim. Visit schwab.com to learn more.

[Paddy Hirsch]

As we've reported before on this show, U.S. administrations at least as far back as George W. Bush's, have been pushing European nations to increase their defence spending. But throughout the US has remained committed to the principle of NATO's Article 5, which says that an attack against one ally is considered as an attack against all allies. That commitment appears to have ended with President Trump.

[Donald Trump]

Well, I think it's common sense, right? If they don't pay. I'm not going to defend them. No, I'm not going to defend them. I got into a lot of heat when I said that. He said, oh, he's violating NATO. And, you know, the biggest problem I have with NATO, I really, you know, I mean, I know the guys very well, they're friends of mine. But if the United States was in trouble and we called them, we said, we got a problem. France, we got a problem. A couple of others I won't mention. Do you think they're going to come and protect us? They're supposed to. I'm not so sure.

[Adrienne Ma]

Now, for the record, Article 5 of NATO has only ever been invoked once, and it was by the United States. Branislav Slantshev teaches military and war studies at the University of California, San Diego.

[Branislav Slantshev]

When Article 5 was invoked after 9 11, the Europeans responded. Canadians, you know, don't have a military, but they went and they died. The British went and they died. Everybody responded.

[Paddy Hirsch]

That includes the French, by the way, who supported the US by sending troops to Afghanistan, 89 of whom died and more than 700 of whom were wounded. Trump's public scorn for these sacrifices is just one barb on the arrowhead that has pierced the heart of the European American relationship and shredded trust between them.

[Adrienne Ma]

And it's galvanized European governments to make themselves independent of the US when it comes to their defense. But Fenella McGurdy says Europe was already ramping up its defense spending long before Trump came into office. Fenella is a senior fellow for defense economics at the International Institute for Strategic Studies in London.

[Unknown Speaker]

In 2024, we saw record defence spending growth, already 11.7% in real terms, and that was itself an increase. So an acceleration from the level of growth we saw in 2023, which reached 5.2%. And that was an acceleration from the growth the year before.

[Paddy Hirsch]

The EU plan announced last week will likely break new records. It advocates a massive ramp up of defence industrial production capacity, and it unlocks a combined $866 billion in military spending over four years. That's about what the US spends in a single year on defence. So Branislav says it's not even close to a conversion to a war economy, but it could still be good medicine for Europe.

[Branislav Slantshev]

The European manufacturing base is astonishing. It can produce high precision machinery. It has all sorts of talent. If it's done right, it should generate economic benefits for these countries. And so that should alleviate some of the problems that Europe has been struggling with.

[Adrienne Ma]

Governments will be pumping money into building factories and Strengthening manufacturing. It could mean a boom for companies in those sectors, hopefully lots of new jobs. But to come up with that funding, countries are going to have to make some hard choices. Fenella says. In fact, in some cases, they already are.

[Unknown Speaker]

It's requiring countries to incur more debt. It's requiring restructuring of debt laws.

[Paddy Hirsch]

Germany just last week approved an historic change to its debt laws, allowing it to borrow more for defence. Denmark did similar. And other countries seemed likely to follow suit. All of this, of course, could balloon deficits and stoke inflation. But even if European governments do manage to pull a Goldilocks and get their borrowing and their spending just right, there are still plenty of other challenges to building out a coherent defence.

[Unknown Speaker]

Arguably, Europe can increase the funding, they can increase the money, they can incur more debt. But it's the capacity of European defence industry to then respond to that increase of demand. Because the defence industry has been run on a lean outlook. It was very much all about efficiencies. Targeted production runs, no stockpiling.

[Adrienne Ma]

Right now, the US dominates Europe's military supply chain. It provides rocket launcher systems and artillery shells and fighter jets to European forces.

[Paddy Hirsch]

Yeah. And to wean themselves off America, the EU's 27 nations and 27 armies will have to find new suppliers of equipment and ammunition. Some of those suppliers will themselves be European, but others will come from overseas. The whole process of coordinating who makes what and when and for whom will be complicated.

[Unknown Speaker]

It will really be key to ensure that there is that cohesion across Europe and including countries that aren't in the eu, looking at how to work with NATO, coordinating the demand across industry to make sure that everyone isn't demanding the same thing at the same time, creating competing demands for the same resources and creating those further supply chain issues. That's one of the issues at the moment as well.

[Paddy Hirsch]

And no matter how much money Europe throws at the ramp up of its defence capacity, the creation of these new supply chains and production lines won't happen overnight, Branislav says.

[Branislav Slantshev]

So it will be years. These are all future investments that will take two to three years to start seeing some significant changes for sure. The military strategist now are spending a lot of time trying to figure out exactly where these investments need to be.

[Adrienne Ma]

Made, which is no easy task. The military threat from Russia is very different to what it was just five years ago, and it keeps changing. Branislav says that means Europe needs to adopt new technologies and wean itself from old ones, even those that have required considerable investment in the past.

[Branislav Slantshev]

Everything is changing right now. This current war Things have evolved dramatically. Initially, for instance, everybody was talking artillery in tanks. That was a big thing. Then the tanks turned out not to be super effective. Now everything is drones and the missiles, right? And everything that is related to how you can keep electronic warfare from the interference. Do you have eyes in the sky? So the satellites. So these are the kind of capabilities we should not be building to fight the last three wars, we should be building to fight the next one.

[Paddy Hirsch]

Europe can do all sorts of things to move quickly, or at least more quickly than it usually does. It can convert old factories to make arms and reconfigure existing ones to become dual use civilian and military production hubs. It can develop supply relationships with other arms providers like South Korea or Israel.

[Adrienne Ma]

But whatever it does, it'll take time, Fenella says, and because of that, the US will likely remain part of the European defense equation for the foreseeable future.

[Unknown Speaker]

It takes decades for a lot of these programs. So I think that there's some level of dependence will always be there, certainly in things like heavy lift transport and things like that, because those capabilities do take time to develop. And I think Europe could get there, but not perhaps in the timeframe it needs. So there's always going to be some level of reliance on the US and hopefully some partnerships going forward, which ultimately is good for US defence industry as well.

[Paddy Hirsch]

Partnerships. Because in future it won't just be Europe relying on the us. America's withdrawal from Europe is part of a pivot to Asia that began under the Obama administration, whether President Trump likes it or not. As the US continues to square up to China, it will need allies. It will need Europe, just as it did after 911 when it asked for help and got it.

[Adrienne Ma]

This episode was produced by Cooper Katz McKim and engineered by Jimmy Keeley. It was fact checked by Sierra Juarez. Kicking Cannon edits the show and the indicators for production of npr.

[Unknown Speaker]

This message comes from Bombas. Their slippers are designed with cushioning so every step feels marshmallowy soft. Plus, for every item purchased, Bombas donates to someone in need. Go to bombas.com NPR and use code NPR for 20% off your first order. This message comes from Mint Mobile. Mint Mobile took what's wrong with wireless and made it right. They offer premium wireless plans for less and all plans include high speed data, unlimited talk and text and nationwide coverage. See for [e-mail] Switch this message comes from Warby Parker. If you wear glasses, you know how hard it is to find the perfect pair. But step into a Warby Parker store and you'll see it doesn't have to be. Find a Warby Parker store near [e-mail] retail.