With US President Donald Trump leaning towards Russia when advocating a stop to the war in Ukraine and making clear that the US will no longer foot the bill to ensure Europe’s security, talk of “Russian expansionism” in Europe has become louder. This has fuelled calls for Europe to rearm itself. However, there is little appetite among the continent’s current rulers for enhanced taxes on the rich to fund the increase. The fallout has been a discussion on the need for Europe to shed its fiscal conservatism, institutionalised in the form of “fiscal rules” capping budgetary deficits and setting public debt ceilings. However, though those rules have been diluted in practice, there is strong opposition to rethinking the conservative macroeconomic policy framework that a Europe led by Germany has embraced. If borrowing is not an option, defence will have to be financed, it is argued, by diverting funds from welfare spending, accelerating the process of dismantling Europe’s famed “welfare state.”

Accustomed over the last 75 years to relying on the United States (US) to ensure its security and back-stop on the North Atlantic Treaty Organization (NATO), Europe is coming to terms with an American president who has said that European governments must find the wherewithal to defend themselves. This turn in US policy following the return of Donald Trump was in itself, in the words of Frech President Emmanuel Macron, an “electroshock” (Khalaf et al 2005). But coming at a time when NATO’s effort to contain Russia and defend a Europe-influenced Ukraine faces defeat, the Trump administration’s pivot to negotiating with the Russians, admonishing Ukrainian President Volodymyr Zelensky for persisting with war, and withdrawing American defence support to Europe, is forcing a rethink of spending priorities in Europe.