Part 5/8:
While the defense sector in Europe has seen substantial investments—companies like Bae and Rheinmetall are thriving—the overarching economic challenges persist. Key structural flaws remain; notably, European countries struggle with inadequate access to affordable raw materials, which hampers efficient spending on military upgrades.
Economic Strain and Recession Risks
The implications of ramping up military expenditure in a time of economic instability are profound. The EU does not enjoy the luxury of the US dollar's status as the world's reserve currency, making their ambitious borrowing plans particularly precarious. In the face of rising yields and potential trade wars instigated by the US, Europe’s economic position deteriorates further.