The interchangeable terms “war economy” or “war economy” are reminiscent of dramatic measures from dark ages: governments that transformed their entire economic systems and industrial productions to prioritize production for the war effort.
Commissioner Thierry Breton began regularly invoking the concept in early March, when he sought – and continues to rapidly – expand the EU government’s ordering and manufacturing of ammunition and weapons to supply both Ukraine and also replenish their own supplies.
The commissioner has just toured more than a dozen arms factories across the block, where he has heard complaints about the failure to sign long-term contracts. Despite several EU decisions to increase funding and remove barriers to joint procurement, he says efforts are progressing much too slowly.
Image: The Print Collector/Heritage Images/Picture Alliance
“The delays do not meet our immediate needs,” Breton said in a May 3 news conference. “Therefore – and I say this clearly – there is a need to advance the industrial base and transform it into a ‘war economy,’ if you allow me to put it that way.”
Permission not granted?
But it seems that Breton has not consulted all member states – if at all – on whether they would actually “allow” this [him] to put it this way: if they had a choice.
Germany is probably one of the countries that is most sensitive to this concept. As Berlin’s ambassador to Poland, Thomas Bagger knows a lot about the pressure on arms deliveries. He finds Breton’s tactics unproductive. “You will not have a positive reaction to the term ‘war economy’ in Germany,” Bagger said succinctly at the Lennart Meri conference in Tallinn, Estonia earlier this month. “It’s not the right way to mobilize the effort.”
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This reaction is not at all surprising, explains Edward Lucas from the Center for European Policy Analysis (CEPA) and tells DW that he would ban the term completely. “It means very different things in different countries,” he notes.
“A real ‘war economy’ is when men come with guns and take over your factory and make them produce more guns. I don’t think anyone is actually proposing that” in Europe, although Lucas emphasizes that Russia has already taken such steps.
“In Germany there are echoes of Nazi economic control with the colossal suffering and abuse of forced laborers,” Lucas told DW in Tallinn. “It’s a bit like saying, ‘We’ve got to get this to plantation pace in the United States.’ That would not immediately be a sign of productivity, but a sign of the darkest time in American history! I don’t think so.” “I don’t think you can solve that with slogans. You solve that by actually sitting down at the table and making difficult financial regulatory decisions that lead to the desired outcome.”
Reinforce rhetoric, not industry
Another analyst, Ben Tallis of the German Council on Foreign Relations (DG`), notes that French President Emmanuel Macron has also spoken of a “war economy” without taking the dramatic measures that would entail. “That would have a lot of implications,” says Tallis, “a lot of government control of the economy and government direction of the economy. It would probably mean rationing of different kinds, which would send a very interesting signal to the European people. “I don’t think the current generation of politicians in Western Europe are ready to send.”
But it is necessary to send a signal of urgency if the EU – and NATO – want the weapons-making machines to be declassified. It’s understandable why some EU officials are trying the term, says Nathalie Tocci, head of Italy’s institute for international affairs. They need to fill a huge gap in threat perceptions across Europe and “convince those member states that are very far from the front lines, rather than spend money.” [on domestic issues] In – whatever, Calabria – they have to spend them on the defense industry to send arms to Ukraine.” Tocci says some people already support this, “but it just takes time to make that argument convincing to everyone .”
Estonian Defense Minister Hanno Pevkur says no one needs to explicitly invoke a “war economy” in his country, which has already poured more than 1 percent of its GDP into aid to Ukraine. “We don’t have to say anything [it] “Above all,” he told DW. “We see the threat and say that everyone in Europe needs to face the reality that Russia is an existential threat.”
The German ambassador to Poland, Thomas Bagger, believes that invoking a “war economy” in Germany will not work. Image: Arno Mikkor / ICDS
Save for later?
Military historian Slawomir Debski, director of the Polish Institute for International Affairs (PISM), supports this goal but doesn’t think the introduction of a “war economy” is necessary — at least “not yet” — and tells DW that he doesn’t really suspect politicians himself know what they mean when they say it. “In 1942, the United States was able to build large ships in 14 days [instead of two years]” he explained. “That’s the way of privatizing a war economy. So we’re not there and there’s no need to introduce such a regime in our own economy.”
Ben Tallis suggests that rather than just throwing the term away, politicians should start by explaining the thinking behind a “war economy”. “Ukraine is fighting for our freedom and I don’t think that this message has fully reached parts of Western Europe,” he told DW in Tallinn.
“They prevent us from being attacked. If we see it that way, then this really should be our conflict and we should win.” He argues that people should normalize this logic and accept that they are in a serious conflict that they must win. “I think it’s right to start preparing people’s minds for this.”
But the German Ambassador Bagger is not convinced of the idea. “It’s important that we don’t take these different perceptions of the ‘existential threat’ as a fundamental question mark that says the others still don’t get it,” he argued.
“My point is: we get it. But you have to understand that history and geography are extremely powerful teachers and have taught us different lessons.”
Edited by: Andreas Illmer
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