Rethinking defence spending: opportunities and challenges for the Netherlands and Europe
At Maastricht University School of Business and Economics (SBE), academics actively contribute to public debates on issues that shape national and European policy. Prof. Dr. Mark Sanders, an expert in International Economics at SBE, recently shared his insights on the implications of Dutch and European defence spending, highlighting both the challenges and opportunities for long-term stability and prosperity.
As the international security landscape shifts, the debate on defence spending has taken on new urgency in the Netherlands and across Europe. With the American security umbrella no longer to be taken for granted, European nations are called upon to take greater responsibility for their own defence. According to Prof. Dr. Sanders, this presents both challenges and opportunities for Dutch and European stability, cooperation, and long-term societal resilience.
European security and Dutch responsibility
Europe needs to “stand on its own feet and prepare for the worst”, says Prof. Dr. Sanders. From a financial and economic perspective, this is manageable, and it offers an opportunity to strengthen the Netherlands’ integration within Europe. Security for the Netherlands cannot be achieved in isolation: Our security is intertwined with that of Belgium, France, Germany, and now most urgently Ukraine. Cooperation, and shared financial responsibility, across these nations is logical and essential. Our past posture of lecturing other European nations on their budget discipline while relying on their strategic capabilities, including nuclear deterrence, is neither realistic nor prudent.
Balancing long-term socioeconomic impacts
In addition, more defence spending intersects with issues such as inequality and economic resilience. While these factors are often overlooked in security planning, they remain crucial. A strong military defence must be built and maintained, but social and economic vulnerabilities also threaten our way of life in a changing world order. Ensuring that these dimensions are considered in the policy decisions to come is therefore a vital challenge.
Defence and public investment
Defence spending differs from investments in health, education, and social services. Weapons and military capabilities, in the best-case scenario, prevent destruction and do not yield a return. Education and healthcare, in contrast, deliver tangible societal benefits and we should prevent financing defence with budget cuts on such investments. Alternative public funding sources include taxation, national or joint European borrowing, and carefully managed monetary finance via mechanisms such as issuance of a digital euro and centralised European financing. As our shared defence remains an investment in the sense that it safeguards the freedom of future generations of Europeans, there should be no taboo on issuing joint public debt or funding expenses with newly created euro’s. Used in a carefully calibrated mix, these sources can mobilize the necessary resources while maintaining fiscal and monetary responsibility.
Opportunities and risks of a stronger European defence role
The issuance of Eurobonds could provide the Eurozone with a reliable alternative to American debt instruments, creating an “internationally safe asset” and enabling relatively cheap collective European financing. Shared borrowing could fund joint defence initiatives, potentially paving the way for broader federal fiscal tools such as EU-level taxation and automatic stabilisation mechanisms. The main risk now lies in a narrow, short-term focus on individual member contributions, which would undermine solidarity and weaken Europe’s collective security. As Prof. Dr. Sanders notes, “United we stand, divided we will fall”.
Research priorities at the intersection of defence, economy, and society
Looking ahead, several research questions are particularly urgent: How can the European Commission foster a more integrated defence industry? What would a shared procurement, command structure, or even a European Defence Union look like? How can the Dutch government strengthen national and European territorial defence? What opportunities exist for Dutch and European entrepreneurs in defence-related sectors? Finally, how can European societies adapt to the loss of the old security guarantees while seizing on new opportunities? It is clear that the answers to all these questions come with a price.
The evolving security environment therefore presents a rare opportunity for the Netherlands and Europe to rethink its financial architecture. European defence spending is not a zero-sum cost but as a strategic, long-term societal investment. By integrating economic, social, and security considerations, and grounding the debate in academic research from institutions such as Maastricht University, Europe can navigate this challenge while reinforcing both national and European resilience.
Learn more
Prof. Dr. Mark Sanders discusses the key financial challenges of future defence spending in an interview with BNR Nieuwsradio. He explains who may ultimately pay the bill and why European cooperation will be crucial in the years ahead.
Prof. Dr. Mark Sanders
Mark Sanders is a Professor of International Economics at Maastricht University, School of Business and Economics. His research focuses on innovation, entrepreneurship, and economic growth, with a more recent focus on the role of entrepreneurship and financing in the energy transition.
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