America has ditched Europe. That presents an economic opportunity

As a rapid rise in military spending across Europe looks increasingly likely, could it also give the region’s economy a much-needed shot in the arm? That depends on where the money comes from and how it is spent.

2025 has not been kind to Europe so far. The risk of war on the continent has been declared the highest it’s ever been, while data has shown the mighty US economy pulling even further ahead of its European counterpart. As a rapid rise in military spending across Europe looks increasingly likely, could it also give the region’s economy a much-needed shot in the arm, making Europeans both safer and richer? That depends on where the money comes from — taxes or borrowing — and how the money is spent — on imported weapons or, rather, the kind of home-grown innovation that produced the life-saving three-point seat belt, for example. “Increased defense spending could significantly boost Europe’s economic growth and industrial base if outlays are targeted at high-tech, regionally made armaments,” the Kiel Institute, an economic think tank in Germany, said recently. European nations are facing up to the once-unthinkable prospect of defending themselves in a potential future conflict without the help of the United States. Last month, US Defense Secretary Pete Hegseth urged Europe to take “responsibility” for its own security. The US remains committed to NATO, he said, but will “no longer tolerate an imbalanced relationship which encourages dependency.” Distancing itself even further from Europe, the Trump administration then held talks with Moscow to explore ending the war in Ukraine — without inviting officials from either the European Union or Ukraine.