Frank Slijper, “Guns, Debt and Corruption“, Transnational Institute, 14 April 2013

High levels of military spending played a key role in the unfolding economic crisis in Europe and continues to undermine efforts to resolve it.

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Download Guns, Debt and Corruption: Executive Summary (pdf, 77KB)

Five years into the financial and economic crisis in Europe, and there is still an elephant in Brussels that few are talking about. The elephant is the role of military spending in causing and perpetuating the economic crisis. As social infrastructure is being slashed, spending on weapon systems is hardly being reduced. While pensions and wages have been cut, the arms industry continues to profit from new orders as well as outstanding debts.

The shocking fact at a time of austerity is that EU military expenditure totalled €194 billion in 2010, equivalent to the annual deficits of Greece, Italy and Spain combined.

Perversely, the voices that are protesting the loudest in Brussels are the siren calls of military lobbyists, warning of “disaster” if any further cuts are made to military spending. This paper shows that the real disaster has emerged from years of high European military spending and corrupt arms deals. This dynamic contributed substantially to the debt crisis in countries such as Greece and Portugal and continues to weigh heavy on future budgets in all of the crisis countries.

The power of the military-industrial lobby also makes any effective cuts less likely. This is perhaps most starkly shown in how the German government, while demanding ever higher sacrifices in social cuts, has been lobbying behind the scenes against military cuts because of concerns this would affect its own arms industry.

The paper reveals how:

• High levels of military spending in countries now at the epicentre of the euro crisis played a significant role in causing their debt crises.
• The debts caused by arms sales were often a result of corrupt deals between government officials but are being paid for by ordinary people facing savage cuts in social services.
• Military spending has been reduced as a result of the crisis in those countries most affected by the crisis, but most states still have military spending levels comparable to or higher than ten years ago.
• The military spending cuts, where they have come, have almost entirely fallen on people – reductions in personnel, lower wages and pensions – rather than on arms purchases.
• While countries like Germany have insisted on the harshest cuts of social budgets by crisis countries to pay back debts, they have been much less supportive of cuts in military spending that would threaten arms sales.
• Continued high military spending has led to a boom in arms companies’ profits and an even more aggressive push of arms sales abroad ignoring human rights concerns.
• Many research studies show that investment in the military is the least effective way to create jobs, regardless of the other costs of military spending.

Read the full article here.