Il Sorpasso 2014: Can Europe Balance Defence and Economics?

Rome, Italy. 16 October. Cardinal Richelieu, that great sixteenth century French homme d’état once said, “Rulers are the slaves of their resources”.  In 1979 the Italian economy surpassed that of Britain.  It was a great moment for Italians which they proudly dubbed “Il Sorpasso” - the overtake.  In spite of chaotic government the Italian economy was booming.  Italian satisfaction did not last long. In 1995 the British economy was once again ahead and the gap between the two economies widened rapidly.  Today, the British economy is some 22% bigger than the Italian with the gap still widening.  This week the IMF highlighted a new Sorpasso.  In spite of ‘soft’ world growth Asian economies are surging past European economies underlying the rapid extent to which the balance of world power and wealth is shifting.  Il Sorpasso is not only apparent in the economic sphere.  Europe and its defence is sliding rapidly down the defence league table.  Since 2012 thirteen of the ‘top’ twenty defence cutters are in NATO Europe.  Europe is sacrificing defence for economics. Can a balance between the two be struck?

Yesterday in London General Sir Rupert Smith, Professor Mike Clarke and I discussed hard defence choices with British defence chiefs.  The UK may be in a far healthier economic position than Italy but in spite of David Cameron’s rhetoric to the contrary the British military still faces significant further cuts after the May 2015 general elections.  Consequently, unless new moneys are found the British will no longer be able to afford the ‘little bit of everything, but not much of anything’ high-end force of today.  They will be forced to opt instead for an even smaller force that retains a significant amount of a few significant things but only at the expense of some very important things. That will mean; a) a further loss of British sovereign independence; and b) ever more reliance on allies.

However, a British strategy that is more reliant on allies faces a big problem.  Well, lots of them actually. Italy is of course an important friend and ally of Britain.  However, the Italian public debt crisis could soon devastate public expenditure here. Like France Italy this year will not meet its EU commitment to keep the deficit no bigger than 3% GDP as part of the Eurozone’s Stability and Growth Pact.  Defence expenditure will again no doubt be raided by the Italian Government to maintain other ‘essential’ services such as health and welfare.

Contrast Italy and indeed Europe with the world beyond Europe's borders.  Frederick the Great once captured the ethos of the aggressive geopolitics when he asked to justify the use of force.  “The superiority of our troops, the promptitude with which we can set them in motion, in a word the clear advantage we have over our neighbours”.  President Putin is clearly a disciple of Frederick. Indeed, Russia for all its current economic travails, surpassed the UK some four years ago, now spends 20% of its entire public budget on defence and seems determined to continue to do so.  

The contrast between Asia and Europe is even more worrying.  China will increase its defence expenditure 12.7% this year, the latest double digit increase since 1989.  India and Japan will soon surpass Britain and France to become the fourth and fifth biggest global defence spenders respectively.  

Anyway and anyhow one cuts these figures they mark a massive and dangerous shift of military power away from Europe’s liberal powers and in the cases of China and Russia in favour of illiberal powers. If unchecked or unbalanced the implications for Europe’s future defence (or lack of it) and world security are profound, not least because of the pressure Europe's defence 'abstinence' puts on the Americans, irrespective of the promises Europeans made at last month's NATO Wales Summit.

Last week French IMF Chief Executive Christine Lagarde called on European leaders to do two things; undertake deep structural reforms to Eurozone economies to bring them into the real world and invest in economic stimulus in the form of big infrastructure projects.  Viewed from here in my beloved Italy one sees the urgent need for such reforms.  And yet it is questionable whether Italian society or indeed Italian state institutions are strong enough to cope with the kind of long, hard austerity shock favoured for example by Germany.

Faced by a collapse in tax revenues and living standards many EU leaders have in effect abandoned defence for economics.  Consequently, many European militaries are on the verge of an obsolescence meltdown and are virtually unusable. And yet the defence of Europe and Europeans is a legitimate political and strategic obligation that cannot simply be opted out from.  

Therefore, in parallel with improving Europe’s infrastructure via the proposed European capital investment funds it would also make sense for Europeans to create a capital defence investment fund.  Such a fund would act in tandem with efforts to modernise and harmonise the European Defence and Technological Base (EDTIB).

Montesquieu once said, “…whenever an accidental, that is, a particular cause, has destroyed a state, a general cause also existed which led to the fall of this state...”  If Europe allows defence to be sacrificed for economic ‘security’ Il Sorpasso 2014 could mark the moment when the illiberal triumphed over the liberal in the pursuit of power and influence in the twenty-first century.  Do Europeans really want such a world?  If not Europeans should heed the words of Madame Lagarde this week; “just get on with it!”

Julian Lindley-French