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● Europe’s Fate: Can They Survive Without the US?

Europe and U.S. Defense Cost Readjustment and Fiscal Deficit Expansion…Analysis of Ripple Effects on the Global Economy

1. Trump-Zelensky Meeting and Suspension of Military Support

Recent live broadcast of the White House meeting between President Trump and President Zelensky, revealed fierce debates regarding military support.

Amidst the signing of a mineral agreement and subsequent heated explanations during the meeting, the U.S. intention to halt U.S.-made weapons and military support provided to Ukraine was revealed.

Following the U.S. announcement of suspension of support, concerns are being raised about the potential for European countries to face the burden of supporting Ukraine, along with increased uncertainty in global economic outlook.

2. U.S. Defense Spending Cuts and Global Military Redeployment

The U.S. Department of Defense has embarked on large-scale defense spending cuts and is reorganizing the existing international military support system.

In particular, while the Indo-Pacific region maintains the status quo and the Northern Command maintains support related to the homeland, the situation focusing on the European Command is being highlighted.

This indicates that as the U.S. concentrates more weapons production and defense investment in the Asian region, the burden of European defense costs is expected to increase further.

3. European Defense Spending Increase and Fiscal Deficit Issues

To fill the gap caused by the suspension of U.S. support, European countries require a massive increase in weapons, including an additional 300,000 troops and thousands of tanks, infantry fighting vehicles, artillery, and 155mm howitzers.

European think tanks argue that total defense spending should be increased to approximately 3.5% of GDP, predicting additional expenditures of over 250 billion euros annually.

This process, which exceeds fiscal deficit regulations and existing budget allocation rules, is expected to increase instability related to international financial markets.

This situation leads to a complex crisis where fiscal deficits, international finance, economic outlook, and defense cost issues interact with the global economy.

4. Significant Expansion of Defense Budgets in Germany and European Countries

Germany recently decided to consider amending the constitution at the government level to exclude defense spending from public debt calculation.

In addition, major European countries are seeking ways to secure additional funds by easing existing fiscal rules and attracting defense fund raising and private investment.

European countries such as Germany, France, and Italy have resolved to invest large-scale budgets to support Ukraine and strengthen their own defense capabilities, despite the burden of fiscal deficits.

5. Utilization of Seized Russian Funds and Future Challenges for the European Economy

Based on the amount of assets seized from the Russian Central Bank after the Ukraine war, European countries are showing moves to use these funds for supporting Ukraine and increasing defense spending.

Although the financial situation of each country is similar, such fund management is assessed as a precursor to changes in the global economic order, while also burdening the economic outlook.

Ultimately, the reduction of U.S. military support and the increase in Europe’s own defense costs are expected to cause significant repercussions in international financial markets and the economic outlook.

< Summary >

Following the recent Trump-Zelensky meeting, as the U.S. declared the suspension of military support to Ukraine, Europe is burdened with increased defense costs and fiscal deficits.

The U.S. is focusing on the Indo-Pacific, while Europe is undertaking additional troop deployments, tank, and weapon purchases to fill the gap in existing U.S. military support.

European countries are seeking bold measures such as expanding defense spending to approximately 3.5% of GDP, amending the constitution, and establishing defense funds.

In addition, changes in fiscal policies linked to international finance, such as the utilization of seized Russian assets, are expected to have a significant impact on the global economy and economic outlook.

This deeply analyzes the current situation where major keywords such as the global economy, economic outlook, defense costs, fiscal deficits, and international finance interact.

[Related Articles: Expansion of European Defense Costs and Its Impact, Germany’s Defense Spending Policy for Overcoming Fiscal Deficits]

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