Saturday

4th Feb 2023

Opinion

The military-industrial complex cashing-in on the Ukraine war

  • A war on the EU's doorstep has justified a shifting of the goalposts with regard to arms companies accessing ever-expanding sources of public and private finance (Photo: STNGR industries)
Listen to article

Since Russia's full-scale invasion of Ukraine in February 2022 media attention has regularly focused on the military assistance provided by states to bolster Ukraine's war effort with Nato members delivering almost $40bn [€38bn] in military aid to date.

Despite this unprecedented outpouring of support, nine months later the war drags on and there has been little public scrutiny of those who are profiting from the misery — the arms industry.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Nato members were already spending 17 times more than Russia on military expenditure before the war and Nato collectively enjoys a superior defence capacity and more sophisticated weaponry.

Despite this, since the invasion European leaders have pledged unprecedented increases to their military budget. By mid-May 2022, bloc members had announced almost €20bn in increases with the European Commission considering as a matter of urgency the "short-term need to replenish and expand defence stocks including to compensate for the military assistance to Ukraine".

Similarly, the EU earmarked half a billion euros for joint arms procurement and announced future increases to the European Defence Fund, which finances the research and development of arms.

Structural changes were taking place across the EU, not only to fast-track arms to Ukraine, but also to make large pools of public finance available to the highly lucrative arms industry.

From the outset arms manufacturers have eyed this war as a profitable business opportunity.

New research from Stop Wapenhandel and the Transnational Institute reveals that the arms industry has used the sentiment of fear to whitewash its image and position itself as an essential partner that can provide the necessary tools to ensure security.

The EU and its member states have been very receptive, having long viewed arms companies as expert allies and key partners, rather than commercial, profit driven entities.

In the days following the outbreak of war, an appeal was made by German arms lobby group BDSV for the EU to "recognise the defence industry as a positive contribution to social sustainability" under sustainable finance taxonomy (ESG).

In the months that followed, European banks and other investors that previously refrained from engaging arms companies shifted course, partly in response to pressure from governments, and began to look more favourably on ending their exclusion from investment opportunities.

On European Defence Innovation Day, European Defence Agency chief executive Jiří Šedivý said that 'the brutal Russian war of aggression in Ukraine vividly shows why we need to urgently strengthen European defence', while the European Commission's high representative for foreign affairs and security policy, Josep Borrell, added that "we either innovate [sic] or we risk becoming irrelevant in the field of security and defence".

Though this securitised framing was already ingrained in European policies long before the invasion, a war on the EU's doorstep has justified a shifting of the goalposts with regard to arms companies accessing ever-expanding sources of public and private finance.

20 percent of two percent

At the June 2022 Nato summit in Madrid an innovation fund was launched, which will invest €1bn of public money over the next 15 years in 'early-stage start-ups and other venture capital funds'. Nato policy already stipulates that members must strive to invest at least two-percent of GDP in their military budgets, of which at least 20 percent should go to arms purchases.

If this trend towards greater leniency continues, it is not inconceivable that arms companies including those involved in the development, production or maintenance of nuclear weaponry, may eventually be able to access funds earmarked for social sustainability projects.

If the war in Ukraine has taught us anything it is that militarism does not work. It did not deter Russia from invading Ukraine and engaging in a protracted war, and it will not diminish the terrifying prospect of nuclear warfare — only through nuclear disarmament can this threat be countered, not by militarising further.

Despite militarism being a fundamental part of the problem and not the solution, European political and financial institutions, and the arms industry alike, have embraced wholesale the notion of militarised security evoking a common language and deploying terms such as 'competition', 'innovation', or 'enterprise'.

Vast sums that could otherwise be invested in health, education, and other essential social services, or to offset the excessive warming of our planet and the rising cost of energy, are instead being diverted for investment in the research, development and procurement of arms in an already over-armed world.

This is no longer about responding to the war in Ukraine, this is about driving a new arms race.

If we take European leaders at their word that Europe must militarise further to counter the Russian threat, but considering how vastly over-armed EU member states already are, when will enough be enough? Building Europe's security on the profit based dreams of arms companies and their shareholders will only fuel future wars and exacerbate human suffering.

Author bio

Niamh Aine Ni Bhriain is programme coordinator and researcher at the Transnational Institute , the Amsterdam-based NGO founded in 1974 as the international programme of the Washington DC-based Institute for Policy Studies, advocating for justice, democracy, and sustainability.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

How Nato's Bucharest summit came back to bite in Ukraine

Was Bush right, to want to offer Ukraine immediate Nato membership? Or was Europe right, to offer it as a distant prospect? There were certainly no answers on offer in that hall of mirrors in Bucharest.

Nato renews membership vow to Ukraine

Ukraine foreign minister Dmytro Kuleba on Tuesday asked for air defence systems and generators, as Russia has been pounding Ukraine's vital energy infrastructure.

EU aims to ramp up financing for Ukraine

On Wednesday, the EU commission is expected to lay out detailed plans on the new €18bn assitance package for Ukraine for next year, while disagreements over financing remain.

How road & rail are just as important as tanks in fighting Russia

Proofing European security against Russian aggression must include more than just military hardware: equally pivotal is the improvement and expansion of the continent's critical transport infrastructure. European policymakers have been aware of this need since at least 2017.

Europe is giving more aid to Ukraine than you think

'Europeans need to pull their weight in Ukraine. They should pony up more funds.' Such has been the chorus since the start of the war. The problem is the argument isn't borne out by the facts, at least not anymore.

Latest News

  1. Greece faces possible court over 'prison-like' EU-funded migration centres
  2. How the centre-right can take on hard-right and win big in 2024
  3. Top EU officials show Ukraine solidarity on risky trip
  4. MEPs launch anonymous drop-box for shady lobbying secrets
  5. Hawkish ECB rate-rise 'puts energy transition at risk'
  6. MEPs push for greater powers for workers' councils
  7. How Pavel won big as new Czech president — and why it matters
  8. French official to take on Islamophobia in EU

Stakeholders' Highlights

  1. Party of the European LeftJOB ALERT - Seeking a Communications Manager (FT) for our Brussels office!
  2. European Parliamentary Forum for Sexual & Reproductive Rights (EPF)Launch of the EPF Contraception Policy Atlas Europe 2023. 8th February. Register now.
  3. Europan Patent OfficeHydrogen patents for a clean energy future: A global trend analysis of innovation along hydrogen value chains
  4. Forum EuropeConnecting the World from the Skies calls for global cooperation in NTN rollout
  5. EFBWWCouncil issues disappointing position ignoring the threats posed by asbestos
  6. Nordic Council of MinistersLarge Nordic youth delegation at COP15 biodiversity summit in Montreal

Stakeholders' Highlights

  1. Nordic Council of MinistersCOP27: Food systems transformation for climate action
  2. Nordic Council of MinistersThe Nordic Region and the African Union urge the COP27 to talk about gender equality
  3. Friedrich Naumann Foundation European DialogueGender x Geopolitics: Shaping an Inclusive Foreign Security Policy for Europe
  4. Obama FoundationThe Obama Foundation Opens Applications for its Leaders Program in Europe
  5. EFBWW – EFBH – FETBBA lot more needs to be done to better protect construction workers from asbestos
  6. European Committee of the RegionsRe-Watch EURegions Week 2022

Join EUobserver

Support quality EU news

Join us