Borrow? Cut spending? Raise taxes? European governments are exploring all avenues to finance the increase in military spending expected in the coming years, driven by the dual pressures of the Russian threat and American disengagement. While some have already set budget targets and identified potential funding sources, not all have reached that point. In other countries, the debate is just beginning regarding an effort that will inevitably strain other priorities.

Decisions are likely less challenging within governments that have balanced public finances and moderate debt. Denmark, with a budget surplus, exemplifies this. On February 19, the government, composed of Social Democrats, Liberals, and Moderates (centrist), decided to increase the defense budget to 3% of GDP by 2026, requiring 120 billion Danish kroner (€16 billion), in addition to the 155 billion already planned until 2033. A portion should be funded by the 59 billion kroner budget surplus anticipated by the Ministry of Finance, thanks to the growth of the Danish economy. Borrowing is also being considered, with public debt around 33% of the GDP. However, the proposal faces criticism, notably from business leaders advocating for reduced public spending.

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